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Gold down more than 1% as stronger greenback weighs

Published 02/06/2012, 05:13 AM
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Investing.com - Gold prices were down for a second day on Monday, falling more than 1% as a broadly stronger U.S. dollar weighed on investor demand for the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,718.85 a troy ounce, down 1.23% during European morning trade.     

Gold futures were likely to test support at USD1,702.84 a troy ounce, the low of January 26 and resistance at USD1,737.86, the session high.

The greenback pushed higher against all of its major counterparts amid uncertainty ahead of a deadline for Greece to decide whether to accept the conditions attached to a second bailout package.

Greek political leaders were holding talks in Athens to discuss whether they can agree to conditions required by the European Union, European Central Bank and International Monetary Fund to meet the requirements for a EUR130 billion aid package.
 
Over the weekend Greek Prime Minister Lucas Papademos said coalition members had agreed on some conditions, but others still needed to be addressed.

Gold prices came off an 11-week high on Friday, after better-than-expected U.S. payrolls data lifted the dollar and called into question the prospect of further quantitative easing by the Federal Reserve.

The U.S. Department of Labor said the economy added 243,000 new jobs last month, the fastest increase in nine months, bringing down the unemployment rate to a three-year low of 8.3%.

Commodities priced in dollars become more expensive to investors holding other currencies when the greenback is strong.

Elsewhere on the Comex, silver for March delivery was down 1.01% and trading at USD33.408 a troy ounce, while copper for March delivery was down 1.15% and trading at USD3.857 a pound.


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