Spot gold firmed on Wednesday, after posting its biggest one-day decline since late June as a meeting of euro zone finance ministers disappointed some investors looking for more progress on resolving the region's debt crisis. Gold has been under pressure from a dollar rally in recent weeks, with uncertainty over whether the U.S. Federal Reserve will launch a third round of quantitative easing, known as QE3, keeping gold bulls on edge. "Gold will probably remain rangebound. Without QE3, the pressure on the upside stays," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong, adding he saw it trading in a range of $1,550-$1,600. Fung said there was fresh buying interest from China on gold's slide overnight and that most investors were likely to stick to a buy-on-dips and sell-on-the-rally strategy as prices drift without a clear direction. Spot gold gained 0.4 percent to $1,574.50 an ounce by 10.49 p.m. EDT On Tuesday, after losing 1.4 percent on Tuesday. The U.S. gold futures contract for August delivery edged down 0.3 percent to $1,574.80. The correlation between the dollar and gold stood at -0.56, indicating the strongest inverse correlation in nearly two months. A reading of -1 suggests a perfect inverse correlation in which one asset rises and the other declines. Technical analysis suggests spot gold could drop to $1,553 an ounce during the day, Reuters market analyst Wang Tao said. The physical market was subdued. Some bargain hunters booked materials after prices tumbled in the previous session. "There was some buying, but not a lot," said a Singapore-based dealer. "Prices have to break below $1,565 to attract more buyers, because that is where most people bought when prices rose from $1,530 level." Euro zone finance ministers failed to agree on a final figure for aid to ailing Spanish banks, although the European Union has set aside 30 billion euros to be available by the end of July if there is an urgent need. Germany's top court will address on Tuesday whether Europe's new bailout scheme and budget rules are compatible with national law in a process influencing not just how the region's debt crisis can be tackled, but how much deeper European integration can go. Investors will also be watching U.S. economic data to gauge the likelihood of possible changes in the Fed's stance on further monetary easing. Base metals and oil gained after reeling in the previous session when regulators accused Iowa-based broker PFGBest of misappropriating over $200 million in customer funds for more than two years. Precious metals prices 10.49 p.m. EDT on Tuesday Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1574.50 6.81 +0.43 0.68 Spot Silver 27.00 0.18 +0.67 -2.49 Spot Platinum 1423.50 6.17 +0.44 2.19 Spot Palladium 575.90 4.92 +0.86 -11.74 COMEX GOLD AUG2 1574.80 -5.00 -0.32 0.51 7318 COMEX SILVER SEP2 26.99 0.10 +0.38 -3.33 1718 Euro/Dollar 1.2260 Dollar/Yen 79.34 COMEX gold and silver contracts show the most active months Reuters
