SAN FRANCISCO (MarketWatch) — Gold futures wavered Tuesday, holding below the $1,730-an-ounce level as investors gauged the metal’s appeal against a backdrop of a stronger dollar, weaker-than-expected U.S. retail sales and uncertainty over whether Greece will get a second bailout.
At last check, gold for April delivery GC2J -0.09% was down $2.20, or 0.1%, to $1,722.90 an ounce on the Comex division of the New York Mercantile Exchange.
It traded between a high of $1,729.90 and a low of $1,713.80.
Strength in the U.S. dollar put pressure on dollar-denominated gold futures. The ICE dollar index DXY +0.33% , which measures the greenback against a basket of six other currencies, traded at 79.299 , up from 78.963 in late North American trading on Monday.
But the precious metal continued to find some support as investors remained cautious towards Greece ahead of the euro-zone finance ministers meeting Wednesday to approve a second bailout for the nation. Read more in Europe Markets.
Meanwhile, U.S. retail sales rose in January by a seasonally adjusted 0.4%, the Commerce Department reported Tuesday. That was the most in four months, but it still fell short of the MarketWatch forecast for a 1.0% gain. Read more on retail sales.
Investors also continued to digest late Monday news of debt rating cuts by Moody’s Investors Service on Spain, Italy, Portugal, Slovakia, Slovenia, and Malta. Moody’s also cut outlooks on France, Britain and Austria, but those countries retained their ratings for now. Read more on the downgrades.
“Safe-haven demand for gold continues due to concerns that Greece’s ‘bailout’ is yet another short-term panacea, and Moody’s downgrade of various European nations’ ratings have reignited contagion fears,” said analysts at GoldCore in a note.
The precious metal had declined 40 cents, or less than 0.1%, on Monday to settle at $1.724.90 an ounce in regular trading in New York.
The yellow metal’s safe-haven appeal was tempered on Monday after the Greek parliament ratified austerity measures demanded by the country’s euro-zone partners in exchange for more funds.
Silver futures also traded lower along with gold, with March silver SI2H -0.15% down 13 cents, or 0.4%, at $33.60 an ounce. Copper for March delivery HG2H -0.89% traded 4 cents lower at $3.80 per pound.
Platinum, palladium slip
April platinum PL2J -0.86% also declined $17, or 1%,to $1,632.70 an ounce while March palladium traded at $686.75 an ounce, down $11.80, or 1.7%.
“Platinum and palladium are suffering from a bit of buying fatigue, here,” said Tim Murray, general manager of precious-metals marketing at Johnson Matthey.
Moody’s outlook cuts on France, the U.K., and Austria also “put the brakes on equities and that’s opened the door for some profit-taking in platinum and palladium,” he said.
“As for the gold-platinum spread, it really comes down to the fear quotient,” he said. “Gold is running at a premium due to fear in the market and the expectation that both euro and U.S. money presses will soon be running overtime to pump more liquidity into their respective markets.”
Myra Saefong is a MarketWatch reporter based in San Francisco. Sarah Turner is MarketWatch's bureau chief in Sydney.
