Forexpros – Gold futures were lower for the first time in four days during European morning trade on Tuesday, easing off the highest level in nearly two weeks as investors booked profits ahead of Wednesday’s summit of European leaders.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,586.65 a troy ounce during early European trade, dipping 0.15%.
It earlier fell by as much as 0.3% to trade at a session low of USD1,585.95 a troy ounce. Prices touched USD1,598.95 a troy ounce on Monday, the highest since May 10.
Gold futures were likely to find support at USD1,542.85 a troy ounce, the low from May 17 and near-term resistance at USD1,604.75, the high from May 9.
Investors booked profits from a three-day rally that took prices 4% higher, as markets remained cautious ahead of Wednesday’s summit of European leaders.
Market players were wary amid concerns over a divide between France’s new President Francois Hollande, who favors measures designed to support growth and pro-austerity Germany.
President Hollande was expected to propose the introduction of joint euro bonds at the summit, but Germany has repeatedly resisted the idea, arguing they would lessen pressure for heavily indebted countries to get their finances in order.
Meanwhile, technical traders noted that upward price movement seemed stalled, with the market unable to break above the key resistance level of USD1,600-an-ounce.
Market analysts noted that gold prices will likely face some resistance if they attempt to break above USD1,600 an ounce in the coming sessions as Europe’s debt woes will likely push investors to seek the relative safety of the U.S. dollar at the expense of the yellow metal.
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.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets in recent months.
Elsewhere on the Comex, silver for July delivery eased up 0.05% to trade at USD28.33 a troy ounce, while copper for July delivery added 0.3% to trade at USD3.512 a pound.
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