Investing.com - Gold futures were down during early European morning trade on Monday, trading at the lowest level since early January, as investors continued to seek the relative safety of the U.S. dollar amid growing concerns over political uncertainty in Greece.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,574.35 a troy ounce during early European trade, shedding 0.6%.
It earlier fell by as much as 0.68% to trade at USD1,573.15 a troy ounce, the lowest since January 3.
Gold futures were likely to find short-term support at USD1,566.15 a troy ounce, the low from January 3 and resistance at USD1,639.05, the high from May 8.
Gold prices posted their worst weekly losses of the year last week, losing 3.65%, as growing fears over an escalation of the debt crisis in the euro zone and disappointing Chinese data prompted investors to seek the relative safety of the U.S. dollar.
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.
The euro fell to a three-and-a-half-month low against the U.S. dollar in early trade Monday, weighed by concerns that ongoing political turmoil in Greece could result in the county’s eventual exit from the euro zone.
On Sunday, Alexis Tsipras the head of Greece’s largest anti-bailout party Syriza rejected an invitation from the country’s president to attend a last-ditch cross party talks, due to be held later in the day, fuelling fears that a fresh round of elections is unavoidable.
Parties have been unable to reach an agreement over whether Greece should continue to implement unpopular austerity measures demanded by the country’s international creditors in exchange for its EUR130 billion bailout agreement.
Adding to the negative sentiment, ratings agency Fitch warned Friday that it would place the sovereign ratings of all euro zone members on review pending possible downgrades, if Greece was to exit the euro zone as a result of its current crisis.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% to trade at 80.62, the highest since March 16.
Gold’s losses in recent sessions have been exacerbated after prices broke below key support levels, triggering fresh sell orders amid bearish chart signals.
Technical traders expect the next level of support for gold to be at USD1,567 and then USD1,550 after breaking below USD1,600 last week.
Some market participants noted that heavy losses in stocks and other commodities markets accelerated gold’s sell-off, as traders were forced to sell their gold holdings to raise cash to cover losses elsewhere.
In October 2008, gold prices tumbled 18% as turmoil in global financial markets led to losses in global equity and commodity markets. The precious metal rallied 23% in the next two months.
Elsewhere on the Comex, silver for July delivery tumbled 1.3% to trade at USD28.51 a troy ounce, just above the lowest since January 3, while copper for July delivery retreated 1.5% to trade at USD3.593 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,574.35 a troy ounce during early European trade, shedding 0.6%.
It earlier fell by as much as 0.68% to trade at USD1,573.15 a troy ounce, the lowest since January 3.
Gold futures were likely to find short-term support at USD1,566.15 a troy ounce, the low from January 3 and resistance at USD1,639.05, the high from May 8.
Gold prices posted their worst weekly losses of the year last week, losing 3.65%, as growing fears over an escalation of the debt crisis in the euro zone and disappointing Chinese data prompted investors to seek the relative safety of the U.S. dollar.
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.
The euro fell to a three-and-a-half-month low against the U.S. dollar in early trade Monday, weighed by concerns that ongoing political turmoil in Greece could result in the county’s eventual exit from the euro zone.
On Sunday, Alexis Tsipras the head of Greece’s largest anti-bailout party Syriza rejected an invitation from the country’s president to attend a last-ditch cross party talks, due to be held later in the day, fuelling fears that a fresh round of elections is unavoidable.
Parties have been unable to reach an agreement over whether Greece should continue to implement unpopular austerity measures demanded by the country’s international creditors in exchange for its EUR130 billion bailout agreement.
Adding to the negative sentiment, ratings agency Fitch warned Friday that it would place the sovereign ratings of all euro zone members on review pending possible downgrades, if Greece was to exit the euro zone as a result of its current crisis.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% to trade at 80.62, the highest since March 16.
Gold’s losses in recent sessions have been exacerbated after prices broke below key support levels, triggering fresh sell orders amid bearish chart signals.
Technical traders expect the next level of support for gold to be at USD1,567 and then USD1,550 after breaking below USD1,600 last week.
Some market participants noted that heavy losses in stocks and other commodities markets accelerated gold’s sell-off, as traders were forced to sell their gold holdings to raise cash to cover losses elsewhere.
In October 2008, gold prices tumbled 18% as turmoil in global financial markets led to losses in global equity and commodity markets. The precious metal rallied 23% in the next two months.
Elsewhere on the Comex, silver for July delivery tumbled 1.3% to trade at USD28.51 a troy ounce, just above the lowest since January 3, while copper for July delivery retreated 1.5% to trade at USD3.593 a pound.