Gold still remains under $1200 at the end of the week after the results of stress tests of 91 Banks in Europe, where only 7 banks failed to prove they would survive financial crisis. After the results, the faith of governments in their financial institutions was restored to some extent, in relation to the ongoing debt situation in Europe.

Traders who are losing in equities markets are now dumping precious metals and other safe haven assets to recover their losses. However gold which has been declining over the past couple of weeks doesn’t seem to make a potential gain in the near future. Analysts predict that gold price will further drop to US$ 1,165 by the end of August. Meanwhile other precious metals such as silver and platinum have gained and are at $18.14 and $1544 respectively.

Gold is currently at $1,186.4 and it is expected that when market will open after 48 hrs, the price of gold will fall $3 and will reach around $1,183. Gold prices are falling due to the last week’s affect on consumer price index (CPI) which declined about 0.1% to restrain inflation fears and the situation will not improve unless the worsening fiscal situation in Europe and the economic recovery in US is firmly dealt with.

The latest story making headlines this morning is the emergence of the stress results carried out on the European banks. The results of these tests are yet to be disclosed as the global financial markets impatiently await the final results.

The Committee of European Banking Supervisors is expected to publish the results of the tests in 20 European Union countries at 5pm London time.

These tests have been conducted to get a clear picture of how these banks stand today and if they have enough resources, should there be another financial collapse in the future.

According to various media reports, several Spanish banks have failed tests, that include the Spain’s 18 cajas. Slovenia also admitted yesterday that its largest bank, Nova Ljubljanska Banka, would fail the stress tests.

There is great deal of controversy that surrounds the whole issue, some critics have been making some strong comments on the Committee of European Banking Supervisors. One of the hard hitting claims is to call these tests a failure if the Greek banks are able to pass these endurance tests.