Gold ends lower for second session
SAN FRANCISCO (MarketWatch) -- Gold futures fell Tuesday, extending the previous session's losses as investors favored the U.S. dollar amid a lower forecast on economic growth in the euro zone and a credit-rating downgrade for Japan.
Gold for June delivery (GCM2) declined $12.10, or 0.8%, at $1,576.60 an ounce on the Comex division of the New York Mercantile Exchange. Prices lost $3.20, or 0.2%, on Monday.
"Gold is really lacking a theme," said Adam Klopfenstein, a market strategist with Archer Financial in Chicago.
The dollar gathered steam through the day, keeping the pressure on gold and other commodities.
The dollar index (DXY) , which measures the U.S. unit against a basket of six currencies, rose to 81.468, from 80.970 in North American trade late Monday.
Strength in the greenback weighs negative on prices for dollar-denominated commodities, since it makes them more expensive to holders of other currencies. Read more on currencies.
"The strong dollar and lower oil and commodity prices appear to be pressuring gold lower," said Mark O'Byrne, executive director at GoldCore. "Increased risk appetite as seen in the surge in equity indices may also be leading to lower gold prices."
The dollar's strength came as Fitch Ratings on Tuesday downgraded Japan to A+ and kept its negative outlook on the country's credit rating, citing rising public-debt levels. Read more on Japan's downgrade.
Also on Tuesday, the Organization for Economic Cooperation and Development cut its forecast for growth in the euro zone, predicting euro-zone gross domestic product to contract by 0.1% in 2012 before returning to growth of 0.9% in 2013.
The OECD also said policy makers should consider taking steps to pave the way for the joint issuance of so-called eurobonds alongside other measures. Read more on the OECD's outlook.
Against this backdrop, most other metals futures followed gold lower, with palladium bucking the trend.
July silver (SIN2) ended lower despite showing some resilience earlier on. The contract lost 14 cents, or 0.5%, at $28.18 an ounce. Copper for the same month's delivery (HGN2) shed 2 cents, or 0.4%, at $3.49 per pound.