US gold futures fell more than 1 percent early Tuesday, despite a weaker dollar, as a broad decline in the stock market prompted investors to take profits.
At 10:43 am EST (1543 GMT), most-active gold for April delivery on the COMEX division of the New York Mercantile Exchange was down $9.30, or 1.4 percent, at $680.50 an ounce, trading in a wide range between $677.20 and $690.70.
Greg Weldon, chief executive of weldononline.com, said that gold had been inflating with the stock market, driven by good liquidity and supportive monetary dynamics.
However, he said a decline in stocks would put an end to the link between bullion and stocks, and would also be negative to the commodity market.
"If stocks were to come under any lengthy period of pressure, gold would simply be a better investment in terms of outperforming stocks by going down at a less-rapid rate," Weldon said. George Nickas at FC Stone said that former Federal Reserve Chairman Alan Greenspan's comments about a potential US recession had put caution into the marketplace.
Greenspan was quoted as saying it was possible that the US economy might fall into recession by the end of the year. Before Tuesday' pullback, the April gold contract had gained nearly 14 percent since it hit a low of $607.20.
Spot gold was quoted at $678.30/9.05 an ounce, down from $686.10/6.80 an ounce, its late Monday quote in New York. London's afternoon fix was $676.20. In other precious metals, COMEX May silver was down 33.7 cents, or 2.3 percent, at $14.495 an ounce, trading between $14.415 and $14.860.
Spot silver was quoted at $14.360/4.410, compared with $14.670/4.720 late Monday. Silver was fixed in London at $14.490. NYMEX April platinum was down slightly at $1.00 at $1,241.00 an ounce. Spot platinum was quoted at $1,233.00/38.00. NYMEX June palladium fell $5.85, or 1.6 percent, at $356.50 an ounce. Spot palladium fetched $349.50/353.00.
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