Gold futures are on the defensive early Tuesday as some participants sell to book profits after a recent surge. The move comes as some of the recent concerns about Greek debt have abated, but nevertheless ongoing worries about sovereign debt in Europe and even the U.S. remain a longer-term supportive influence, analysts said. Around 9 a.m. EDT (1300 GMT), most-active June gold is down $5.90, or 0.51% to $1,156.30 an ounce on the Comex division of the New York Mercantile Exchange. Lightly traded but nearby April gold fell $4.60, or 0.40%, to $1,157. Most-active May silver declined 15.4 cents, or 0.84%, to $18.26. "Gold had a fairly decent rally in the last few weeks," said Bart Melek, global commodity strategist with BMO Capital Markets. "We're seeing some profit-taking." The June futures rose from a March 24 low of $1,086.10 to a high for the year of $1,170.70 on Monday before falling back. This morning's retreat occurred even though the dollar index is down slightly and the euro is slightly higher, which normally supports gold on buying as an alternative currency. Gold has frequently broken from its inverse relationship with the dollar lately and often benefited even when the dollar rises from the ongoing concerns about sovereign debt in Europe. The metal recently hit record highs in a number of currencies, including the euro. There has also been some apparent profit-taking in gold against some of these currencies so far Tuesday, Melek said. A number of other commodities also are softer, including crude oil. "Gold is getting caught up in that as well," Melek said. A recent rally in many commodities may have been "overdone," since supply/demand fundamentals amid a recovering economy are "better but they are not particularly stellar," Melek said. The European debt issues appear to have eased for the moment, with a research note from BNP Paribas calling a Greek Treasury bill auction "successful." Melek pointed out that the yield on Greece 10-year bonds has fallen "considerably" lately. "As worries of an outright default wane, there is a bit less impetus, at least for now, to go into a precious-metal hedge like gold," Melek said. Still, he said, while prices could pull back or trade sideways in the short term, the longer-term outlook remains constructive since the debt concerns have not completely gone away and there are concerns about U.S. deficits. "Although sovereign credit risk has subsided on the back of Greece's loan support from the euro zone, we do not expect this support for Greece to push gold much lower," said Walter de Wet, analyst with Standard Bank. "Sovereign debt problems cannot be resolved overnight, and this should add underlying support to gold. We therefore expect strong support to come through for gold on approach of $1,130." Analysts with the bullion dealer GoldCore said the metal was due for a pullback and period of consolidation after its recent rally. Still, GoldCore said, the metal technically "looks well" after recently setting record highs in euros, pounds and Japanese yen, with spot metal also taking out resistance between the $1,150 and $1,160 area on the recent ascent.

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