Investing.com - Gold futures trimmed losses during European morning trade on Tuesday, coming off the lowest levels of the session as the euro strengthened against the U.S. dollar following the release of better-than-expected German economic growth data, while markets continued to monitor political developments in Greece.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,558.75 a troy ounce during early European trade, dipping 0.15%.
It earlier fell by as much as 0.6% to trade at USD1,547.75 a troy ounce, the lowest since December 30, 2011.
Gold futures were likely to find support at USD1,523.95 a troy ounce, the low from December 29 and resistance at USD1,639.05, the high from May 8.
Gold futures sank to the lowest level since the start of the year on Monday, as investors sought the relative safety of the U.S. dollar amid growing concerns over a potential Greek exit from the euro zone.
But prices recovered slightly on Tuesday as the euro found support after better-than-expected German economic growth data.
Preliminary data showed that Germany’s economy expanded more-than-expected in the first quarter, indicating that the euro zone’s largest economy is weathering the effects of the crisis in the region.
Germany’s gross domestic product grew by a seasonally adjusted 0.5% in the three months to March, above expectations for a growth of 0.1%. German GDP contracted by an unrevised 0.2% in the fourth quarter of 2011.
But investors continued to monitor political developments in Greece, as the debt-laden country struggles to form a coalition government following last weekend’s elections, fanning fears over a potential Greek default and eventual exit from the euro zone.
Greece’s President Karolos Papoulias was due to hold a fresh round of cross party talks aimed at forming a government later in the day, after a more than week-long political stalemate.
The euro bounced off a four-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.15% to trade at 80.67.
According to market participants, gold prices could come under further selling pressure in the near-future, amid an uncertain technical picture.
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 USD1,544 and then USD1,523 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.
Money managers in gold futures and options cut their net long positions by 20% to the lowest level since December 2008, as investors aggressively unwound their bullish bets in the precious metal after a sharp price pullback.
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 shed 0.2% to trade at USD28.29 a troy ounce, just above the lowest since January 3, while copper for July delivery eased down 0.15% to trade at USD3.549 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,558.75 a troy ounce during early European trade, dipping 0.15%.
It earlier fell by as much as 0.6% to trade at USD1,547.75 a troy ounce, the lowest since December 30, 2011.
Gold futures were likely to find support at USD1,523.95 a troy ounce, the low from December 29 and resistance at USD1,639.05, the high from May 8.
Gold futures sank to the lowest level since the start of the year on Monday, as investors sought the relative safety of the U.S. dollar amid growing concerns over a potential Greek exit from the euro zone.
But prices recovered slightly on Tuesday as the euro found support after better-than-expected German economic growth data.
Preliminary data showed that Germany’s economy expanded more-than-expected in the first quarter, indicating that the euro zone’s largest economy is weathering the effects of the crisis in the region.
Germany’s gross domestic product grew by a seasonally adjusted 0.5% in the three months to March, above expectations for a growth of 0.1%. German GDP contracted by an unrevised 0.2% in the fourth quarter of 2011.
But investors continued to monitor political developments in Greece, as the debt-laden country struggles to form a coalition government following last weekend’s elections, fanning fears over a potential Greek default and eventual exit from the euro zone.
Greece’s President Karolos Papoulias was due to hold a fresh round of cross party talks aimed at forming a government later in the day, after a more than week-long political stalemate.
The euro bounced off a four-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.15% to trade at 80.67.
According to market participants, gold prices could come under further selling pressure in the near-future, amid an uncertain technical picture.
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 USD1,544 and then USD1,523 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.
Money managers in gold futures and options cut their net long positions by 20% to the lowest level since December 2008, as investors aggressively unwound their bullish bets in the precious metal after a sharp price pullback.
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 shed 0.2% to trade at USD28.29 a troy ounce, just above the lowest since January 3, while copper for July delivery eased down 0.15% to trade at USD3.549 a pound.