Forexpros – Gold futures came off the lowest levels of the day during U.S. morning trade on Wednesday, but remained under pressure ahead of a summit of European leaders later in the day amid growing concerns over a possible Greece exit from the euro zone.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,563.25 a troy ounce during early U.S. trade, slumping 0.85%.
It earlier fell by as much as 1.65% to trade at USD1,551.45 a troy ounce, the lowest since May 17. Prices touched USD1,598.95 a troy ounce on May 21.
Gold futures were likely to find support at USD1,542.85 a troy ounce, the low from May 17 and near-term resistance at USD1,598.95, the high from May 21.
Markets were jittery ahead of the European Union summit, amid concerns over a division between France’s new President Francois Hollande, who favors measures designed to support growth and pro-austerity Germany, ahead of the European leaders meeting in Brussels.
A failure to make headway risks jolting markets further, analysts said.
Sentiment broadly weakened earlier, after former Greek Prime Minister Lucas Papademos warned late Tuesday that preparations for a Greek exit were being considered.
The ongoing Greece fears weighed heavily on the euro, which touched a 21-month low against the U.S. dollar before recouping most of the losses.
The dollar index, meanwhile hit its highest level since September 2010 earlier in the session, but turned lower as the day went on, easing pressure on dollar-denominated gold futures.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Meanwhile, technical traders noted of “bearish” chart signals, after the market failed to break above the key resistance level of USD1,600-an-ounce earlier in the week. Prices closed below their 14-day moving average on Tuesday.
Elsewhere on the Comex, silver for July delivery retreated 1.25% to trade at USD27.82 a troy ounce, while copper for July delivery dropped 1.55% to trade at USD3.433 a pound.
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