Gold traded either side of unchanged last night in a range of $1180.90 - $1185.55, attempting to consolidate after its $20 selloff over the past two sessions.

Gold advanced to its $1185.55 high during Asian hours from some bargain hunting buying as the dollar slipped to 94.92.

The yellow metal showed resiliency during European time, only dipping to $1180..90 despite a sizeable run up in the dollar (DX found buying over its triple top at 95 to reach 95.37).

The greenback was boosted by a plunge in the euro ($1.1650 - $1.1570, 2-week low) as Italy approved a much higher than expected budget deficit of 2.4% (defying European demands) and Eurozone Core CPI missed expectations.

Global equities were mixed with the NIKKEI up 1.4%, the SCI up 1.1%, European markets were off from 0.2% to 0.7%, and S&P futures were off 0.3%.

At 8:30 AM, slight misses on US Personal Income (0.3% vs. exp. 0.4%) and Core PCE (0 vs. exp. 0.1%) pushed S&P futures lower (-12 to 2908), and tugged the US 10-year bond yield down from 3.041% to 3.03%.

The DX pulled back to 95.21, and gold moved higher. The yellow metal took out last night’s high to reach $1186.50.

Weaker reports later in the morning on the Chicago PMI (60.4 vs. exp. 62) and the University of Michigan Sentiment (100.1 vs. exp. 100.5) knocked the DX further to 94.99 by mid-day.

The DX was also pressured by a rebound in the euro ($1.1629) from a modest lessening of concerns over the Italian budget situation as Italian stocks pared some losses and the 10-year Italian 10-year bond yield pulled back from 3.26% - 3.14%.

Gold tripped buy stops over the previous key support levels at $1187 (50%...

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