Investing.com - Gold futures were little changed during European morning trade on Tuesday, as concerns over Europe’s political troubles pushed their way back onto the agenda.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,674.65 a troy ounce during European morning trade, down 0.1% on the day.
Prices traded in a tight range between USD1,671.25 a troy ounce, the daily low and a session high of USD1,677.55 a troy ounce.
Gold prices were likely to find support at USD1,653.35 a troy ounce, the low from January 28 and near-term resistance at USD1,684.35, the high from January 30.
Fresh political uncertainty in Spain and Italy revived fears over the debt crisis in the region, pushing peripheral borrowing costs higher and undermining investor confidence in the region.
Spanish Prime Minister Mariano Rajoy faced calls to step down following allegations of corruption against him and senior officials in the ruling Popular Party, while uncertainty over the outcome of upcoming Italian elections mounted as former Prime Minister Silvio Berlusconi gained ground in opinion polls.
The yield on Spanish 10-year bonds rose to 5.46% early Tuesday, while similar-maturity Italian yields inched up to 4.50%.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks, and flock to traditional safe haven assets like U.S. Treasuries and the dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.1% to trade at 79.68.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Investors were also cautious ahead of the outcome of the European Central Bank’s policy meeting on Thursday.
Losses were limited as investors remained focused on the outlook for Federal Reserve monetary policy following last Friday’s U.S. jobs data, which indicated the U.S. economy has maintained its momentum, but not so much as to alter the view that the Fed will remain accommodative.
Elsewhere on the Comex, silver for March delivery fell 0.1% to trade at USD31.69 a troy ounce, while copper for March delivery dipped 0.05% to trade at USD3.767 a pound.