Investing.com - Gold futures advanced during European morning trade on Tuesday, hovering just below a one-week high as market participants continued to focus on Spain’s deteriorating financial situation.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,579.85 a troy ounce during early European trade, gaining 0.55%.
It earlier rose by as much as 0.65% to trade at a session high of USD1,580.85 a troy ounce. Prices touched USD1,585.65 on Monday, the highest since May 22.
Gold futures were likely to find support at USD1,533.25 a troy ounce, the low from May 23 and near-term resistance at USD1,594.35, the high from May 22.
The yield on Spain’s 10-year bond rose to 6.52% in early trade on Tuesday, the highest level since November of last year after the government announced that it was to recapitalize one of the country’s largest commercial lenders Bankia.
The announcement fuelled fears that the rising cost of bank rescues could force Madrid into seeking an international bailout.
Speaking Monday, Spanish Prime Minister Mariano Rajoy said Spain was “finding it very difficult to finance itself”, but ruled out the possibility that the country will need a bailout.
Meanwhile, investors were eyeing developments in Greece, after a weekend opinion poll indicated that the pro-bailout New Democracy party may be able to form a government following the June 17 elections.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.2% to trade at 82.18. On Friday, the index hit the highest level since September 2010.
Technical traders said that gold prices remain vulnerable to the downside in the near-term should the market fail to break above key resistance close to USD1,585 a troy ounce.
Meanwhile, analysts at French lender Societe Generale said in a report earlier that in the near term, gold is vulnerable to shifts in macroeconomic sentiment. The report however noted that the precious metal could regain its safe haven status following major risk-off events.
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 in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Gold has lost its safe haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for July delivery rose 0.7% to trade at USD28.57 a troy ounce, while copper for July delivery jumped 1.25% to trade at USD3.491 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,579.85 a troy ounce during early European trade, gaining 0.55%.
It earlier rose by as much as 0.65% to trade at a session high of USD1,580.85 a troy ounce. Prices touched USD1,585.65 on Monday, the highest since May 22.
Gold futures were likely to find support at USD1,533.25 a troy ounce, the low from May 23 and near-term resistance at USD1,594.35, the high from May 22.
The yield on Spain’s 10-year bond rose to 6.52% in early trade on Tuesday, the highest level since November of last year after the government announced that it was to recapitalize one of the country’s largest commercial lenders Bankia.
The announcement fuelled fears that the rising cost of bank rescues could force Madrid into seeking an international bailout.
Speaking Monday, Spanish Prime Minister Mariano Rajoy said Spain was “finding it very difficult to finance itself”, but ruled out the possibility that the country will need a bailout.
Meanwhile, investors were eyeing developments in Greece, after a weekend opinion poll indicated that the pro-bailout New Democracy party may be able to form a government following the June 17 elections.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.2% to trade at 82.18. On Friday, the index hit the highest level since September 2010.
Technical traders said that gold prices remain vulnerable to the downside in the near-term should the market fail to break above key resistance close to USD1,585 a troy ounce.
Meanwhile, analysts at French lender Societe Generale said in a report earlier that in the near term, gold is vulnerable to shifts in macroeconomic sentiment. The report however noted that the precious metal could regain its safe haven status following major risk-off events.
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 in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Gold has lost its safe haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for July delivery rose 0.7% to trade at USD28.57 a troy ounce, while copper for July delivery jumped 1.25% to trade at USD3.491 a pound.