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Forexpros – Gold futures moved lower in Asian trade Tuesday, retreating from a six-week high as political uncertainty in Greece and Italy helped lift investor enthusiasm for the safe-haven precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,794.25 a troy ounce during early Asian trade, falling 0.19%, after hitting a high of USDS1,796.95, its highest level since September 21.
Over the weekend, Greek Prime Minister George Papandreou agreed to resign, leaving the door open for the creation of a new government that could better secure international funds and avoid default on the country’s debt.
On Monday, Greece’s Finance Minister Evangelos Venizelos held talks with European Union Economic and Monetary Affairs Commissioner Olli Rehn to negotiate payment of Greece’s next tranche of financial aid.
European finance officials met in Brussels on plans to expand the European Financial Stability Facility, the rescue fund for debt-threatened euro-zone members.
Meanwhile, rumors continued to circulate that Italian Prime Minister Silvio Berlusconi would be the next European leader to step down, as 10-year Italian bonds surged to their highest level since the launch of the single-currency euro.
Berlusconi dismissed reports of his looming resignation despite heavy pressure from within his own political party ahead of a key parliamentary vote later Tuesday.
Gold found downward selling pressure from reports that Germany had rejected calls to underpin the EFSF with gold reserves from the Bundesbank, an idea floated at the recent Group of 20 summit in Cannes, France.
On Monday, Germany’s Economic Minister Philipp Roesler said that the nation’s gold reserves “remain untouchable.”
A lower dollar helped to limit losses on gold futures, as a weaker greenback makes gold futures purchases less expensive for holders of other currencies.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% to 77.12.
On the Comex, silver for December delivery advanced 0.27% to trade at USD34.92 a troy ounce, while copper for December delivery fell 0.16% to trade at USD3.570 a pound.
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