Investing.com - Gold prices fell in Asian trading on Wednesday as Greek talks to form a coalition broke down, setting the stage for a new round of elections that could possibly up the chances of Greece being shown the way out of the eurozone.
Fears of a Greek exit sent investors favoring the greenback, gold's traditional hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded down 1.04% at USD1,540.95 a troy ounce.
Gold traded at a low of USD1,539.05 a troy ounce and hit a high of USD1,545.15 a troy ounce during the session.
Gold futures were likely to test support at USD1,523.95 a troy ounce, the low on Dec. 29, and resistance at USD1,563.85, the high from May 15.
Greek political turmoil continued to hammer gold prices.
Talks among the country's political parties broke down in Athens earlier, and the country will likely hand over power to an interim government and hold new elections in June.
Talk of new elections has stoked fears that widespread anger over austerity measures slapped on the country in exchange for bailout money may push enough left-leaning politicians into office who oppose austerity and favor exiting the currency bloc.
The dollar has risen on fears Greece will ditch the single currency, which has sent the euro and gold falling.
Meanwhile in the U.S., data hit the wire supporting the greenback as well.
Headline U.S. consumer prices, including food and energy costs, came in flat in April.
Core consumer prices, which are stripped of volatile food and energy prices, rose 0.2% in April, in line with expectations,
A Federal Reserve Bank of New York manufacturing activity index for the New York area jumped to 17.1 in May from 6.6 in April, far outpacing market calls for an 8.5 reading.
The data depicted a U.S. economy moving along and in less need of Federal Reserve intervention, which tends to weaken the dollar in exchange for economic growth.
Investors shrugged off solid economic growth figures out of Germany and focused instead on Greece, which was further bearish for the precious metal.
Gross domestic product in Europe's largest economy grew by a seasonally adjusted 0.5% in the first quarter of 2012 from the previous quarter, above expectations for growth of 0.1%.
Year-on-year GDP growth came to 1.7%, outpacing expectations for 0.8% expansion.
The eurozone as a whole avoided a recession in the first quarter, with quarter-on-quarter GDP growth coming in flat, outperforming expectations for a contraction of 0.2%.
The eurozone economy contracted by 0.3% in the fourth quarter of 2011.
Elsewhere on the Comex, silver for July delivery was down 1.62% and trading at USD27.625 a troy ounce, while copper for July delivery was up 0.29% and trading at USD3.504 a pound.
Fears of a Greek exit sent investors favoring the greenback, gold's traditional hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded down 1.04% at USD1,540.95 a troy ounce.
Gold traded at a low of USD1,539.05 a troy ounce and hit a high of USD1,545.15 a troy ounce during the session.
Gold futures were likely to test support at USD1,523.95 a troy ounce, the low on Dec. 29, and resistance at USD1,563.85, the high from May 15.
Greek political turmoil continued to hammer gold prices.
Talks among the country's political parties broke down in Athens earlier, and the country will likely hand over power to an interim government and hold new elections in June.
Talk of new elections has stoked fears that widespread anger over austerity measures slapped on the country in exchange for bailout money may push enough left-leaning politicians into office who oppose austerity and favor exiting the currency bloc.
The dollar has risen on fears Greece will ditch the single currency, which has sent the euro and gold falling.
Meanwhile in the U.S., data hit the wire supporting the greenback as well.
Headline U.S. consumer prices, including food and energy costs, came in flat in April.
Core consumer prices, which are stripped of volatile food and energy prices, rose 0.2% in April, in line with expectations,
A Federal Reserve Bank of New York manufacturing activity index for the New York area jumped to 17.1 in May from 6.6 in April, far outpacing market calls for an 8.5 reading.
The data depicted a U.S. economy moving along and in less need of Federal Reserve intervention, which tends to weaken the dollar in exchange for economic growth.
Investors shrugged off solid economic growth figures out of Germany and focused instead on Greece, which was further bearish for the precious metal.
Gross domestic product in Europe's largest economy grew by a seasonally adjusted 0.5% in the first quarter of 2012 from the previous quarter, above expectations for growth of 0.1%.
Year-on-year GDP growth came to 1.7%, outpacing expectations for 0.8% expansion.
The eurozone as a whole avoided a recession in the first quarter, with quarter-on-quarter GDP growth coming in flat, outperforming expectations for a contraction of 0.2%.
The eurozone economy contracted by 0.3% in the fourth quarter of 2011.
Elsewhere on the Comex, silver for July delivery was down 1.62% and trading at USD27.625 a troy ounce, while copper for July delivery was up 0.29% and trading at USD3.504 a pound.