Investing.com – Gold futures moved lower in Asian trade Tuesday, as reports pointed to the likely resumption of monetary aid to Greece, cooling enthusiasm for the safe-haven precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,899.55 a troy ounce during early Asian trade, down 0.09%, after hitting a high of USDS1,903.75.
European Central Bank President Jean-Cluade Trichet said earlier Monday, it remains his “working assumption” that Greece would take the steps needed to win approval from the ECB, the International Monetary Fund and the European Commission to receive its next batch of funding.
Trichet’s comments followed a Wall Street Journal report that International Monetary Fund officials said Greece would receive its next round of bailout funds later this month.
Despite the recent pullback in gold prices, German lender Commerzbank said, "The same factors that strengthened gold's price rally before are still intact in our opinion."
"Besides the persistent debt problems in euro-zone countries and the threat of the U.S. economy sliding into recession, interest rates are set to remain at a very low level for an extended period," the lender said in a report released earlier.
Greece’s government, over the weekend, announced it would be imposing a new property tax to cover a EUR2 billion deficit in its budget target for this year.
European investors added further downward pressure on gold, selling the precious metal to cover losses on slumping equities in the region.
By the end of Monday trade, France’s CAC 40 dropped 4.02% to 2,854.81, Britain’s FTSE 100 fell 1.63% to 5,129.62, and Germany’s DAX declined by 2.27% to close the session at 5,072.33.
Elsewhere on the Comex, silver for December delivery rose 0.47% to trade at USD40.55 a troy ounce, while copper for December delivery edged up 0.02% to trade at USD3.998 a pound.