Investing.com - Gold prices dropped in Asian trading on Wednesday after investors rushed to the dollar on comments from former Greek Prime Minister Lucas Papademos the country cannot rule out the possibility that it could leave the eurozone.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded down 0.64% at USD1,566.35 a troy ounce.
Gold traded at a low of USD1,566.05 a troy ounce and hit a high of USD1,568.55 a troy ounce during the session.
Gold futures were likely to test support at USD1,526.95 a troy ounce, the low on May 16, and resistance at USD1,642.95, the high from May 7.
In Greece, the country's financial stability fund approved a EUR18 billion capital injection for the country's four top banks, however, former Prime Minister Lucas Papademos reportedly told Dow Jones newswires the possibility of a Greek exit from the eurozone was a real one.
The news sent the euro plunging and gold's traditional hedge, the dollar, rising.
European leaders are due to meet later Wednesday at a summit, and concerns are brewing that France's new President Francois Hollande will begin to voice support for more growth and spending, which would be at odds from Germany's pro-austerity stance, which further buoyed the dollar.
Fitch Ratings, meanwhile, downgraded Japan to A+ and slapped a negative outlook on the country's credit rating, citing public debt concerns, which further fueled demand for dollars and pressured gold downwards.
Meanwhile, physical demand for the precious metal in India weakened earlier
Elsewhere on the Comex, silver for July delivery was down 0.75% and trading at USD27.968 a troy ounce, while copper for July delivery was down 0.02% and trading at USD3.465 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded down 0.64% at USD1,566.35 a troy ounce.
Gold traded at a low of USD1,566.05 a troy ounce and hit a high of USD1,568.55 a troy ounce during the session.
Gold futures were likely to test support at USD1,526.95 a troy ounce, the low on May 16, and resistance at USD1,642.95, the high from May 7.
In Greece, the country's financial stability fund approved a EUR18 billion capital injection for the country's four top banks, however, former Prime Minister Lucas Papademos reportedly told Dow Jones newswires the possibility of a Greek exit from the eurozone was a real one.
The news sent the euro plunging and gold's traditional hedge, the dollar, rising.
European leaders are due to meet later Wednesday at a summit, and concerns are brewing that France's new President Francois Hollande will begin to voice support for more growth and spending, which would be at odds from Germany's pro-austerity stance, which further buoyed the dollar.
Fitch Ratings, meanwhile, downgraded Japan to A+ and slapped a negative outlook on the country's credit rating, citing public debt concerns, which further fueled demand for dollars and pressured gold downwards.
Meanwhile, physical demand for the precious metal in India weakened earlier
Elsewhere on the Comex, silver for July delivery was down 0.75% and trading at USD27.968 a troy ounce, while copper for July delivery was down 0.02% and trading at USD3.465 a pound.