Spot gold prices fell off two-week highs on Tuesday after failing to pierce the $1,700 per ounce mark and as bullion tracked a weaker euro. Losses accelerated in late New York trade after the Comex March options contracts expired. Interest ahead of the options expiry had pushed gold just $4 shy of key resistance, but prices weakened to an intraday low below $1,680 per ounce in late afternoon as the dollar strengthened against the euro.
The slide erased the previous day's rally, falling below the 100- and 200-day moving averages they had breached on Monday. That rally came after Federal Reserve chairman Ben Benanke signalled US interest rates would stay low. That would maintain the low opportunity cost of holding bullion. Spot gold was at $1,679.44 an ounce at 5:21 pm EDT (2221 GMT), down $12.3 or 0.73 percent, after hitting a two-week peak at $1,696.20 earlier in the day.
US gold futures for April delivery settled at $1,684.9 per ounce, down slightly from Monday's settlement of $1,685.6. Daily volume was average, although activity levels so far this month have been higher than the previous months. With three days until the end of the month, volume is already at 3.13 million lots, close to exceeding February's level of 3.2 million lots. Silver was down 0.88 percent at $32.54 an ounce. Spot platinum was up 0.32 percent at $1,648 an ounce, while spot palladium edged down 1.07 percent to $656.