Forexpros – Gold prices fell in early Asian trading on Tuesday, softened by easing physical demand coupled with a strengthening euro.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,769.25 a troy ounce, down 0.32%.
Gold futures were likely to test support at USD1,732.35 a troy ounce, last Tuesday’s low, and resistance at USD1,788.85, Thursday’s high.
Gold normally trades inversely to the dollar but not always.
Talk that G20 nations had told Europe it has to put up extra money to battle its debt crisis if it expected the rest of the world to help out weakened the euro earlier.
However, reports later emerged that the International Monetary Fund has previously undisbursed loans set aside for Greece and will add that money into a EUR130 billion Greek bailout facility bolstered the euro, which sent investors ditching both gold and dollars for euro.
Reduced physical demand for the metal also weakened prices.
The metal shrugged off slightly higher than expected levels of M3 money supply in Europe.
Meanwhile, investors sold gold to await results of the upcoming long-term refinancing operation at the European Central Bank, which could flood the market with liquidity, which could be bullish for gold, but also pump up stock prices and the euro later, which could send gold falling.
Elsewhere on the Comex, silver for May delivery was down 0.37% and trading at USD35.472 a troy ounce, while copper for May delivery was up 0.29% and trading at USD3.883 a pound.
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