Futures Pros – Gold futures extended losses on Tuesday, dropping to a fresh two-day low amid profit taking and following a report that Libyan leader Muammar Gaddafi was negotiating an agreement allowing him to step down.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,428.75 a troy ounce during U.S. morning trade, sliding 0.32%.
It earlier fell to USD1,423.75 a troy ounce, the lowest price since March 4.
Gold prices rallied to a record high of USD1,444.60 a troy ounce on Monday, as ongoing violence in Libya and the Middle East boosted the safe haven appeal of the precious metal.
The rally prompted some investors to sell their position on profit taking and lock in gains on speculation that rising prices would result in reduced demand.
Elsewhere, a spokesman with Libya’s opposition groups said earlier Tuesday that Gaddafi was trying to negotiate his resignation and safe departure from the North African country, bringing an end to his four-decade rule.
Al-Jazeera, meanwhile reported late Monday that Gaddafi offered opposition groups to hold a meeting of the country's parliament, the General People’s Congress, to pave the way for him to step down with certain guarantees
Global financial service provider Commerzbank said, “Although there is no confirmation of this at all, it is very likely to have triggered profit-taking by speculative financial investors.”
However, prices remained supported by ongoing fears that unrest would spread to other countries in the region, particularly Saudi Arabia, the world’s largest oil exporter.
Also supporting prices were renewed concerns over the euro zone’s sovereign debt crisis, as the gap between yields on Greek and German government bonds continued to widen.
Meanwhile, Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP U.S. Economic Optimism Index dropped to 43.0 in March, down from February's reading of 50.9.
The index was 3.7 points below its 12-month average of 46.7 and 1.4 points below its reading of 44.4 in December 2007 when the economy entered into the recession.
Elsewhere, silver for May delivery added 0.03% to trade at USD36.02 a troy ounce, while copper for May delivery sank 0.69% to trade USD4.316 a pound during U.S. morning trade.
