28/08/07: Gold futures in the balance

S&P, Nasdaq and Dow Jones all recorded positive futures figures in the morning's trading, fuelling hopes that for gold sellers the recent downturn would be fully reversed.

Monday saw gold futures for December delivery slip by $1.30, with a further decrease of $1.80 on Tuesday, so today's news is welcome to the gold trading market.

Andy Montanto, director at Scotia Mocatta, told Reuters that weaknesses in equity and base metals were responsible for the recent downturn in gold trading, while highlighting a promising rate of investment in gold inventory stocking.

Worries remain, however, about the effect of the current credit squeeze on gold futures, even as gold trading enters the traditionally busy season of autumn and gold is in high demand for Indian and Muslim festivals.

Gold wrist bands are a popular item at the Indian festival of Raksha Bandhan, with other such festivals leading jewelers to buy in gold stocks.

Prospects for domestic investments in gold or anything else were low however, as the Conference Board Consumer Confidence Index, based on a survey of 5,000 US households, showed a drop in figures for August, sinking back down to June levels.