Investing.com - Gold futures declined in thin year-end trade conditions on Tuesday, falling below the key USD1,600-an-ounce level as most traders already closed books for the year and moved to the sidelines, waiting for a fresh start in January.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,597.75 a troy ounce during early European morning trade, dropping 0.68%.
It earlier fell by as much as 0.96% to trade at USD1,592.95 a troy ounce, the lowest since December 19.
Gold futures were likely to find short-term support at USD1,585.65 a troy ounce, the low of December 19 and resistance at USD1,615.55, the high of December 23.
Trading volumes were thin as financial markets in Australia, Hong Kong and New Zealand remained closed for the holidays, while investors were reluctant to open new positions before the new year amid lingering concerns over the euro zone’s debt crisis.
Ratings agency Standard & Poor's has yet to announce if it will cut ratings on any of the 15 countries it has on credit watch negative. Two independent European government sources said Friday that S&P was not expected to release its verdict on euro zone debt ratings until January.
Meanwhile, investors were eyeing Italian three and ten-year bond auctions this week. The yield on Italy’s ten-year bonds topped the critical 7% threshold on Friday, adding to concerns over the country’s handling of its financial troubles.
For much of 2011, investors' typical reaction to bad news from Europe was to buy gold, as it boosts the safe haven appeal of the precious metal, but that relationship has unraveled recently.
Gold has been pressured in recent months, with its safe haven appeal waning as investors prefer the U.S. dollar as their safe haven of choice amid Europe’s deepening sovereign debt crisis.
Year-end selling by hedge funds and tight liquidity in European interbank money markets have also contributed to recent price falls.
Prices have tumbled nearly 15% since hitting a record high of USD1920 in early September. Despite the slump, prices are still 13% higher on the year, on track for its 11th consecutive annual gain.
Elsewhere on the Comex, silver for March delivery shed 0.55% to trade at USD28.92 a troy ounce, while copper for March delivery tumbled 1.25% to trade at USD3.424 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,597.75 a troy ounce during early European morning trade, dropping 0.68%.
It earlier fell by as much as 0.96% to trade at USD1,592.95 a troy ounce, the lowest since December 19.
Gold futures were likely to find short-term support at USD1,585.65 a troy ounce, the low of December 19 and resistance at USD1,615.55, the high of December 23.
Trading volumes were thin as financial markets in Australia, Hong Kong and New Zealand remained closed for the holidays, while investors were reluctant to open new positions before the new year amid lingering concerns over the euro zone’s debt crisis.
Ratings agency Standard & Poor's has yet to announce if it will cut ratings on any of the 15 countries it has on credit watch negative. Two independent European government sources said Friday that S&P was not expected to release its verdict on euro zone debt ratings until January.
Meanwhile, investors were eyeing Italian three and ten-year bond auctions this week. The yield on Italy’s ten-year bonds topped the critical 7% threshold on Friday, adding to concerns over the country’s handling of its financial troubles.
For much of 2011, investors' typical reaction to bad news from Europe was to buy gold, as it boosts the safe haven appeal of the precious metal, but that relationship has unraveled recently.
Gold has been pressured in recent months, with its safe haven appeal waning as investors prefer the U.S. dollar as their safe haven of choice amid Europe’s deepening sovereign debt crisis.
Year-end selling by hedge funds and tight liquidity in European interbank money markets have also contributed to recent price falls.
Prices have tumbled nearly 15% since hitting a record high of USD1920 in early September. Despite the slump, prices are still 13% higher on the year, on track for its 11th consecutive annual gain.
Elsewhere on the Comex, silver for March delivery shed 0.55% to trade at USD28.92 a troy ounce, while copper for March delivery tumbled 1.25% to trade at USD3.424 a pound.