Forexpros – Gold futures traded higher during U.S. trade Tuesday, after bouncing from a one week low as the weaker U.S dollar and continued euro zone worries triggered buying in the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,652.95 a troy ounce during U.S. trade, adding 0.20%.
It earlier gave up as much as 1% to trade at USD1,635.45 a troy ounce, the lowest since April 10.
Gold futures were likely to find support at USD1,613.55 a troy ounce, the low from April 4 and resistance at USD1,685.25, the high from April 2.
The precious metal has been tracking movements in the euro in recent weeks. Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which in the past has been a positive driver of prices.
The single currency found support earlier in the day after an auction of short-term Spanish government debt met with solid investor demand, while better-than-expected data on German economic sentiment also boosted risk appetite.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
There have been renewed concerns of further debt contagion in the euro zone in recent weeks amid fears Spain will be the next in the euro zone to require a bailout.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, gave back 0.06% to trade at 79.69, after being down by as much as 0.21%.
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 lift appetite for the yellowish metal recently.
Elsewhere on the Comex, silver for May delivery climbed 1.10% to trade at USD31.72 a troy ounce, while copper for May delivery added 0.49% to trade at USD3.646 a pound.
&nb
Forexpros
