Investing.com - Gold prices dropped in U.S. trading on Tuesday as investors sold the precious metal for profits and chased the greenback, which trades inversely from gold.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 1.51% at USD1,576.65 a troy ounce in U.S. trading on Tuesday, up from a session low of USD1,574.15 and down from a high of USD1,604.25 a troy ounce.
Gold futures were likely to test support USD1,560.60 a troy ounce, the low from March 8, and resistance at USD1,608.85, Wednesday's high.
Gold prices dropped as the metal's appeal as a hedge to a weakening euro that grew during the Cypriot financial crisis began to wane on Tuesday.
The dollar, meanwhile, saw healthy demand in the wake of rising European unemployment rates, which fueled further profit-taking among investors in gold.
The eurozone unemployment rate hit an all-time high of 12% in February, up from January's original 11.9% reading, which was revised up to 12%.
Eurozone factory data also fueled safe-haven dollar demand.
The eurozone's manufacturing purchasing managers' index hit 46.8 in March, according to Markit Economics, up from a final reading of 46.6 in February but still well below the 50 mark that separates growth from contraction.
Across the Atlantic in the U.S., factory orders rose 3.0% in February, above expectations for an increase of 2.9%, according to the Census Bureau.
The numbers supported the greenback as well.
Elsewhere on the Comex, silver for May delivery was down 2.29% at USD27.303 a troy ounce, while copper for May delivery was up 0.11% and trading at USD3.378 a pound.
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