By Myra P. Saefong, MarketWatch SAN FRANCISCO (MarketWatch) — Gold futures fell Tuesday, struggling to hold above the $1,700 level as a second day of strength in the dollar helped dull demand, although weaker-than-expected U.S. manufacturing data and fresh concerns over a Greek default provided some support. Gold for December delivery GC1Z -1.28% shed $14.80, or 0.9%, to $1,710.90 an ounce on the Comex division of the New York Mercantile Exchange. The contract has already tallied a two-session loss of 1.3%. Earlier, prices sank by as much as $44 to touch a low of $1,681.50. Front-month gold futures haven’t closed below $1,700 since Oct. 24. “Gold is behaving erratically today with some strong currents pushing it in two directions at once,” said Ross Norman, chief executive at London-based bullion broker Sharps Pixley, in emailed comments. He added support is seen at the $1,680 level. Gold’s experiencing some “phenomenal flows of investment money into gold reflected by a surge in demand for [exchange-traded funds] and physical bars on the one hand,” Norman said. On the other, there is “negative impact on gold from a stronger dollar. So, its safe haven status against dollar strength — two traditional and powerful drivers of the gold price [are] at odds with each other.” On Tuesday, the dollar index DXY +1.15% , which tracks the performance of the greenback against a basket of other major currencies, rallied to 77.456, up from 76.243 late Monday. Read more about Tuesday’s currency action. Strength in the dollar tends to dull demand for gold and other commodities since it becomes more expensive for holders of other currencies to buy them. But gold prices pared losses a bit after news that the Institute for Supply Management manufacturing gauge fell to 50.8% in October. Economists surveyed by MarketWatch had expected the ISM to report that its manufacturing-activity index edged up to 52.1% in October, from 51.6% in September. Read more about ISM. Looking ahead, Norman said that gold is “poised for a move significantly higher as the Greek tragedy has not yet fully played out yet. The safe haven role will prevail as the key driver of gold prices as investors seek a lifeboat in crisis.” The Greek government announced Monday it would hold a referendum on the latest bailout in the face of growing public anger over further austerity measures and a deepening recession. Read more about the referendum. On Monday, gold futures fell on the heels of a stronger dollar and as a bankruptcy filing by MF Global Holdings Ltd. MF -16.08% , according to analysts, fueled concerns over the potential for commodity-position liquidations. Read about Monday’s gold action. “It is too early to see how the MF Global story will play out for commodities, but if this is a ‘Lehman Moment,’ then one would expect a brief dip in gold before a rally,” said Norman. Against that backdrop, other metals traded broadly lower, with silver posting the biggest percentage loss. Silver futures for December delivery SI1Z -4.20% fell $1.06, or 3.1%, to $33.30 an ounce on Comex and December copper HG1Z -3.63% traded at $3.53 a pound, down 11 cents, or 3%. January platinum PL2F -1.56% shed $27.60, or 1.7%, to $1,580 an ounce and December palladium PA1Z -2.10% lost $14.80, or 2.3%, to $636.35 an ounce. Myra Saefong is a MarketWatch reporter based in San Francisco.

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