Investing.com - Gold futures extended losses on Tuesday, moving further away from Monday’s six-week high as a broadly stronger U.S. dollar and growing fears over a possible Greek debt default weighed.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,665.45 a troy ounce during U.S. morning trade, slumping 0.78%.
It earlier fell by as much as 0.92% to trade at a two-day low of USD1,661.75 a troy ounce. On Monday, prices rose to USD1,681.65 on Monday, the highest since December 12.
Futures were likely to find support at USD1,645.15 a troy ounce, the low of January 20 and short-term resistance at USD1,681.65, Monday’s high.
On Monday, European Union finance ministers rejected demands by Greece’s creditors that new bonds to be issued in exchange for their existing Greek holdings will carry an interest rate of 4%, prolonging negotiations on the issue.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Earlier in the day, ratings firm Standard & Poor’s declared that it was likely to put Greece into "selective default" once its protracted debt negotiations are concluded.
Further weighing on negative sentiment were reports that Portugal might need a second bailout amid concerns the country may not be able to get financing on the open market next year, according to a report in the Wall Street Journal. Portugal must repay EUR9 billion in debt due September 2013.
Although gold is often seen as a safe haven during times of economic uncertainty, the increasingly grave debt crisis in the euro zone has done little to bolster prices recently. A weakening euro and stronger U.S. dollar have weighed on gold instead.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.47% to trade at 80.25.
Meanwhile, gold traders awaited the outcome of the Federal Reserve’s two-day policy-setting meeting due to begin later Tuesday for indications on how Fed officials see Europe's debt problems impacting the U.S. economy, as well as the need for further stimulus measures.
According to market participants, any signs that interest rates will stay lower for longer could put some near-term pressure on the U.S. dollar, boosting gold prices. Any signs of further easing initiatives in the U.S. are also bullish for precious metal prices.
Elsewhere on the Comex, silver for March delivery shed 0.32% to trade at USD32.16 a troy ounce, while copper for March delivery retreated 0.7% to trade at USD3.772 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,665.45 a troy ounce during U.S. morning trade, slumping 0.78%.
It earlier fell by as much as 0.92% to trade at a two-day low of USD1,661.75 a troy ounce. On Monday, prices rose to USD1,681.65 on Monday, the highest since December 12.
Futures were likely to find support at USD1,645.15 a troy ounce, the low of January 20 and short-term resistance at USD1,681.65, Monday’s high.
On Monday, European Union finance ministers rejected demands by Greece’s creditors that new bonds to be issued in exchange for their existing Greek holdings will carry an interest rate of 4%, prolonging negotiations on the issue.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Earlier in the day, ratings firm Standard & Poor’s declared that it was likely to put Greece into "selective default" once its protracted debt negotiations are concluded.
Further weighing on negative sentiment were reports that Portugal might need a second bailout amid concerns the country may not be able to get financing on the open market next year, according to a report in the Wall Street Journal. Portugal must repay EUR9 billion in debt due September 2013.
Although gold is often seen as a safe haven during times of economic uncertainty, the increasingly grave debt crisis in the euro zone has done little to bolster prices recently. A weakening euro and stronger U.S. dollar have weighed on gold instead.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.47% to trade at 80.25.
Meanwhile, gold traders awaited the outcome of the Federal Reserve’s two-day policy-setting meeting due to begin later Tuesday for indications on how Fed officials see Europe's debt problems impacting the U.S. economy, as well as the need for further stimulus measures.
According to market participants, any signs that interest rates will stay lower for longer could put some near-term pressure on the U.S. dollar, boosting gold prices. Any signs of further easing initiatives in the U.S. are also bullish for precious metal prices.
Elsewhere on the Comex, silver for March delivery shed 0.32% to trade at USD32.16 a troy ounce, while copper for March delivery retreated 0.7% to trade at USD3.772 a pound.