Gold falls as market grows cooler to Spanish bailout

[Ramon Ramirez]

Forexpros - Gold prices fell in Asian trading Wednesday as the market viewed a eurozone bailout fund approved for Spain to prop up its banks with increasing skepticism.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded down 0.24% at USD1,609.95 a troy ounce.

Gold hit at a low of USD1,608.85 a troy ounce and a high of USD1,613.55 a troy ounce during the session.

Gold futures were likely to test support at USD1,600.55 a troy ounce, the low of June 10, and resistance at USD1,618.65, the high from June 12.

Gold tends to trade inversely from the dollar, often tracking the euro and equities markets in recent months.

Early in Asian trading on Wednesday, the dollar dipped on residual talk the Federal Reserve may not rule out stimulating the economy via quantitative easing, which are bond buybacks from banks designed to jolt the economy and fuel jobs demand, with a weaker greenback as a side effect.

The euro was down on fears that a EUR100 billion bailout arranged by the eurozone for Spain to recapitalize its debts won't do enough to solve Spain's broader economic ills.

Gold rose and fell amid the conflicting data, before finally trading lower with the euro on sentiment that even if the Federal Reserve does move, the European debt crisis will continue to send investors moving to the safety of the U.S. dollar.

Elsewhere on the Comex, silver for July delivery was down 0.45% and trading at USD28.818 a troy ounce, while copper for July delivery was down 0.30% and trading at USD3.341 a pound.