Forexpros –
Forexpros – Gold futures moved lower during U.S. afternoon trade Monday, as a broadly stronger U.S. dollar reduced the appeal of the precious metal amid concerns the euro zone’s ongoing debt crisis could worsen following weekend elections in France and Greece.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,638.75 a troy ounce during U.S. afternoon trade, falling 0.40%.
It earlier fell by as much as 0.75% to trade at a session low of USD1,634.85 a troy ounce.
Gold futures were likely to find short-term support at USD1,625.55 a troy ounce, the low from April 25 and resistance at USD1,672.15, the high from May 1.
Gold futures came under heavy selling pressure during Asian and European trading hours as investors cut their exposure to riskier assets amid concerns over the impact of weekend elections in France and Greece on the euro zone’s ongoing debt crisis.
In Greece, neither of the country’s two pro-bailout parties secured enough votes to form a government, as voters favored smaller parties who campaigned against harsh austerity measures.
The Greek election results threw the future of the country’s international bailout agreement into doubt and fuelled fears over a possible Greek exit from the euro zone.
Earlier Monday, the head of the euro zone’s temporary bailout fund, the European Stability Mechanism, said a Greek exit from the euro zone would be a “catastrophe” for the country.
Meanwhile, in France, President Nicolas Sarkozy was defeated by socialist candidate Fran?ois Hollande, who has said he wants to renegotiate the euro zone fiscal pact in order to stimulate growth in the region.
The euro slumped to a three-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.2% to trade at 79.75.
But prices remained supported following Friday’s weaker-than-expected U.S. jobs report, which added to uncertainty over the strength of the U.S. economic recovery and fuelled speculation the Federal Reserve implement a third round of quantitative easing measures to stimulate growth.
The Department of Labor reported the U.S. economy added 115,000 jobs in April, the smallest increase in six months and far short of expectations for a 170,000 increase, after adding an upwardly revised 154,000 jobs in March.
The unemployment rate fell to 8.1%, the lowest since January 2009. However, the data showed that the decline stemmed entirely from people dropping out of the labor force.
Gold investors will be closely watching U.S. data in the second quarter for clues as to the likelihood of a fresh round of monetary easing by the Federal Reserve.
Last week, Fed Chairman Ben Bernanke left open the possibility of further asset purchases to support the U.S. economy.
Elsewhere on the Comex, silver for July delivery dropped 1.28% to trade at USD30.04 a troy ounce, while copper for July delivery soared 1.26% to trade at USD3.768 a pound.
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