NEW YORK – Gold traded below $1,600 an ounce for the first time in four months, continuing its close correlation with the euro.
Comex gold futures prices Tuesday sold off sharply and slumped to a fresh four-month low of $1,595.50 an ounce, basis the June contract.
The euro fell for a seventh straight session, down 0.2 percent at $1.3239, off the day’s low of $1.2981. The single currency traded below the key technical level of $1.30 for a second straight session.
“Today’s euro weakness is overwhelmingly tied to Greece’s difficulty putting together a government,” said Daniel Hwang, senior currency strategist at Forex.com in New York.
“It is an overall risk-off day, however, and the euro will likely remain under pressure due to all the political uncertainty.”
Spot gold was recently down 1.8 percent at $1,607.70.
The market dropped below what was strong technical support at the April low of $1,613.00, and below psychological support at $1,600.00. A rallying US dollar index and lower crude oil prices helped to send gold and silver prices south Tuesday.
The “risk-off” trading day in the market place Tuesday also added selling pressure to the precious metals. June gold last traded down $34.60 at $1,604.50 an ounce. Spot gold was last quoted down $34.80 an ounce at $1,604.25. July Comex silver last traded down $0.717 at $29.405 an ounce.
The London gold fixing was $1,602.50 versus the previous London P.M. fixing of $1,643.75.
Hong Kong shipped 62,907 kilograms of gold to mainland China in March. – SG/Agencies