Gold flat, volume low; investors wonder about central banks

Tue Aug 7, 2012 1:39pm EDT
 
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By Frank Tang

NEW YORK (Reuters) - Gold was nearly flat on Tuesday, with volume much lighter than average for a second day as investors were uncertain about whether central banks would act to stimulate sputtering economies.

Gold traded in a tight range of less than $10, swinging between slight gains and losses, as higher U.S. equities, crude oil and the euro failed to attract much buying or selling of the precious metal.

Volume in U.S. gold futures was poised to end below its 30-day average. Traders said last week's mixed U.S. nonfarm payrolls report fed uncertainty about whether the Federal Reserve will come through with more monetary stimulus -- which would encourage gold buying -- or whether the central bank would refrain from action, which could spur selling.

"Nobody really wants to step in front of the market and be a seller yet as the Fed seemingly just kicks the QE can down the road," David Meger, director of metals trading at futures brokerage Vision Financial Markets.

"We still haven't received the positive news that everybody believed we would see at some point down the road. That's why we are in this no man's land," he said.

Bullion largely ignored comments from Boston Fed Bank President Eric Rosengren that the Fed should launch another bond buying program of whatever size and duration is necessary to get the economy back on its feet. Rosengren is not a voter on the policy-setting Federal Open Market Committee.

Spot gold was up 71 cents at $1,611.10 an ounce by 12:54 a.m. EDT (1654 GMT).

U.S. COMEX gold futures for December delivery were down $2 an ounce at $1,614.20.   Continued...