Gold stays below $1,200 as stronger dollar weighs

Investing.com – Gold prices held below the $1,200-level on Tuesday, as a broadly stronger U.S. dollar curbed the appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery inched up 60 cents, or 0.05%, to trade at $1,194.30 a troy ounce during European morning hours. Futures held in a tight range between $1,192.70 and $1,196.50.

A day earlier, gold lost $9.40, or 0.78%, to end at $1,193.70. Futures were likely to find support at $1,183.50, the low from April 14, and resistance at $1,210.60, the high from April 10.

Also on the Comex, silver futures for May delivery eased up 5.9 cents, or 0.37%, to trade at $15.94 a troy ounce.

On Monday, silver fell to $15.82, the lowest level since March 19, before settling at $15.88, down 34.0 cents, or 2.1%.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.5% to trade at 98.65 early on Tuesday.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

The dollar remained firmer after falling against the other major currencies last week when a run of soft economic data saw investors push back expectations on the timing of a rate hike by the Federal Reserve.

Meanwhile, concerns over the lack of an agreement on economic reforms for bailout funds between Greece and its creditors remained in focus, fuelling fears that the country could default on its debt be forced out of the euro zone.

Elsewhere in metals trading, copper for May delivery slumped 2.5 cents, or 0.91%, to trade at $2.708 a pound. Copper tumbled 4.1 cents, or 1.5%, on Monday as jitters over a bond default in China’s construction sector weighed.

Shenzhen-based Kaisa Group Holdings became the first Chinese property developer to default on its dollar bonds after it confirmed it had failed to pay a coupon on two senior notes on Monday.

Concerns over domestic bond defaults stoked investor worries that financing deals, which have locked up vast quantities of copper, could unravel.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption.

Source: Investing.com
Image: Reuters