Gold continued its downward journey on Tuesday with the global market witnessing a slump in demand.
Gold for August delivery fell $6.30, or 0.5%, to $1,181.90 an ounce on the Comex division of the New York Mercantile Exchange, the lowest price for a most-active contract since May 21. Gold prices are down 6% from June's record highs.
The problem is that there is no safe haven rush to support the gold prices now.
Some investors bought gold as a hedge against instability in the euro during Europe's debt crisis. Those bets have largely been unwound as Europe shows signs of managing its fiscal situation, analysts say. The euro has been on the rise since early June, and gold prices recently have dropped on the European currency's strength.
US equities markets were also stronger, lessening investors' appetite for precious metals. But concerns remain about the pace of economic recovery after weeks of disappointing economic data, analysts say.
Demand for a refuge asset had propelled gold to records in May and June as signs of a slowdown in US growth compounded worries about Europe. Some believe gold holds its value better than other assets during economic turmoil.
Platinum and palladium futures were split in muted trading. Platinum eked out small gains in a rally late in the day, while palladium was down throughout the day on mixed industrial sentiment. Nymex October platinum settled up $1, at $1,513.10 an ounce. September palladium fell $4.70, or 1.1%, to $443.90 an ounce.
