Investing.com - Gold futures edged lower on Tuesday and threatened to post their first quarterly this year after soft European inflation data sparked demand for the U.S. dollar, which trades inversely with the yellow metal.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,210.30 a troy ounce during U.S. trading, down 0.70%, up from a session low of $1,205.00 and off a high of $1,220.50.
The December contract settled up 0.28% at $1,218.80 on Monday.
Futures were likely to find support at $1,182.60 a troy ounce, the low from Dec. 31, 2013, and resistance at $1,232.70, Friday's high.
Eurostat, the statistics arm of the European Union, reported earlier that the euro area's annual inflation rate fell to a five-year low of 0.3% in September from 0.4% in August.
Core inflation, which strips out food, energy, alcohol and tobacco costs, came in at 0.7%, down from 0.9% in August.
Slumping consumer prices fueled market expectations for the European Central Bank to implement fresh stimulus measures to stave off deflationary threats after the bank unexpectedly cut rates to record lows last month.
A separate report showed that the euro zone’s unemployment rate was unchanged at 11.5% in August.
Meanwhile in the United States, the Conference Board reported earlier that its consumer confidence index fell to 86.0 this month from 93.4 in August, whose figure was revised up from a previously reported 92.4.
Analysts expected the index to decline to 92.5 in September, though Europe's soft inflation data served as the pair's chief steering current, boosting the dollar and weakening the euro, often a recipe for falling gold prices.
A separate report showed that a Chicago-area purchasing managers' index fell to 60.5 this month from 64.3 in August. Analysts had expected the index to decline to 61.9 in September.
The dollar still enjoyed support due to expectations that the Fed is moving closer to hiking interest rates, as despite hiccups here and there, longer-term analysis of U.S. indicators points to an economy that is gaining steam.
Gold was on track to post its first quarterly loss of the year though in afternoon trading, the commodity was still up about 0.70% for the year.
Meanwhile, silver for December delivery was down 2.90% at $17.057 a troy ounce, while copper futures for December delivery were down 1.51% at $3.010 a pound.