Gold prices hovered near $1800 an ounce early this morning after soaring more than 2 percent in the previous session, supported by investor safe haven demand as Italy took center stage in the eurozone debt crisis.<\/p>\n
After reaching its correction low of $1,532 per ounce, the gold price has recovered in recent weeks, reaching close to $1,791 in early trading today.<\/p>\n
EU Debt Problems – Italy<\/strong><\/p>\n Italian government bond yields soared to near 15 year highs, putting the EU’s third largest economy front and center of the region’s debt crisis, despite efforts by policymakers scrambling to stem growing contagion.<\/p>\n “Gold will continue to trend higher due to the EU situation and should have no problem rising above $1,800 in the short term.” said Hou Xinqiang, an analyst at Jinrui Futures, adding that prices could correct after gold trades through that level under pressure of profit taking trades.<\/p>\n Latest Price of Gold<\/strong><\/p>\n Spot gold edged down 0.2 percent to $1,791.40 an ounce by 06.30 GMT, easing from a 6 week high of $1,798.09 hit in the previous session. Gold traded in a narrow range of about $5 during the day.<\/p>\n Technical analysis suggested spot gold could target $1,823 to $1,829 range during the day.<\/p>\n Spot gold prices have rallied nearly 5 percent so far this month, as mounting doubts over the EU’s ability to tackle its 2 year old debt crisis drove investors to safe haven assets, and decoupled gold from other commodities which it had followed through much of the past two months.<\/p>\n “There has been a very observable transfer of gold ounces in terms of investment capital from hedge funds, wholesale funds, bullion banks, toward the retail community, and that has put a floor in the price.” said Michael Jansen, commodities analyst with JP Morgan, who forecasts an average $1,869 for gold prices in 2012.<\/p>\n “Sellers are not eager to cash out before prices hit $1,800. People are basically watching what is going to happen in Europe.” said a Singapore based trader.<\/p>\n