Reuters reported that safe-haven bids pulled bullion off session lows, as it outperformed other commodities, despite a drop due to Spain’s economic crisis and Europe’s debt fears.
As quoted in the report:
Gold came under early pressure from tumbling U.S. equities and crude oil after Spain said it sank deeper into recession in the second quarter. Many investors worried the euro zone’s No. 4 economy was closer to seeking a full bailout.
Senior commodities broker at futures brokerage R.J. O’Brien, Phillip Streible, commented:
When gold gets down to a certain range around $1,550-60, investors often consider it a safety play and an inexpensive
hedge in their portfolios. Plus, a lot of people think that weaker global cues are going to entice the Fed to embark on another quantitative easing
plan, so gold’s downside is somewhat limited.