Forexpros – Gold prices fell Thursday as investors avoided the precious metal and snapped up dollar positions on fears that the European debt crisis is seriously eroding credit markets there.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,556.15 a troy ounce early in Asian trade, down 0.51%.
Gold futures were likely to test support at USD1,551.05 a troy ounce, Wednesday’s low, and resistance at USD1,608.65, Monday’s high.
In Europe, bank use of the European Central Bank’s overnight deposit facility hit a record EUR452.03 billion, cementing concerns that financial institutions are hoarding money made available to them from recent loans from the ECB instead of investing it back into the economy.
The news of cash stockpiling in Europe sparked a euro selloff and fueled demand for dollars, which often trades inversely with gold.
Elsewhere on the Comex, silver futures for March delivery were down 1.19% and trading at USD26.910 a troy ounce, while copper futures for March were up 0.05% at USD3.357 a pound.
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