Spot Gold Stabilizes in Europe After Losses

London (July 25)   Gold prices stabilized in Europe Friday following a sharp slide in the previous session, but industry analysts expect further losses to come.

Spot gold was up 0.1% from the previous session's settlement price, trading at $1,294.58 a troy ounce. Silver rose 0.7% to $20.469 an ounce.

During the previous session gold slipped below the key psychological $1,300 an ounce mark.

"Positive economic data put a dampener on the gold market, as risk assets caught a bid and safe haven buying dried up," said analysts at ANZ bank.

Commerzbank noted that figures showing China's gold consumption has weakened this year would likely keep a cap on gains. Record gold buying saw China overtake India in 2013 as the world's largest consumer of the yellow metal.

"The World Gold Council's forecasts of Chinese gold demand, which were issued at the beginning of the year and envisaged demand being on a similar scale in 2014 as it was in 2013, appear ambitious," said the German bank.

Elsewhere in the precious metals group, spot platinum rose 0.5% to $1,469.40 an ounce, while palladium rose 0.4% to $869.80 an ounce.

"The precious metals remain under pressure, support levels are being tested and have been breached for all the metals except palladium," said analysts at FastMarkets in a note to clients. "We wouldn't be surprised to see prices drift lower although we do expect gold to find good underlying support before too long and that should underpin the complex as a whole."

Source: WSJ