Wednesday, 6 Jul 2011 gold market

Spot gold on Wednesday hovered near a 1-1/2-week high hit in the previous session, supported by renewed worries about the euro zone's debt problem after Moody's slashed Portugal's credit rating to junk.

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Moody's also warned that Portugal may need a second round of rescue funds, cutting into risk appetite in financial markets and pushing gold to a 1-1/2-week high of $1,516.49 on Tuesday.

"Portugal was certainly the trigger, and the mood in the financial markets has turned a bit cautious," said a Singapore-based trader.

for technical view point of  Reuters  wang tao

The short-term technical picture has turned positive, with spot gold expected to rebound further towards $1,550 per ounce, said Reuters market analyst Wang Tao.

Brokerage MF Global expects gold to remain rangebound between $1,490 to $1,550 in July, supported by expectations that global monetary policy will remain supportive.