Gold prices are trading higher despite the dollar rising against the euro, as EU finance ministers prepare to meet on Thursday to try and put together a longer term support package for Greece. The cost of insuring EU government debt against default rose to a record after the European Banking Authority reported that 8 out of 90 European banks failed the latest quarterly stress tests, and a larger number, including some of the EU’s largest banking groups, need to raise capital in order to meet requirements.
The U.S. dollar index traded higher morning, on short covering and some safe-haven buying interest on the idea that the U.S. currency is the lesser of evils in the currency markets. Recent price action in the dollar index suggests the index will trade choppy and trendless in the near term. Any further weakening of the dollar index would be a bullish development for the precious metals.
sources: kitco
