New York 20/03/2012 - Comex gold fell towards the lower end of the recent range Tuesday on asset reallocation, a generally stronger dollar and continued concerns over Indian demand.

Gold futures for April delivery settled down $20.30, or 1.2 percent, at $1,647.00 an ounce. Trade was between $1,641.20 to $1,664.90.

“Whichever end of this range breaks first, there's a good chance of that break inducing a $30 dollar move. The market continues in consolidation mode after the recent sell-offs,” London-based broker Triland Metals said in a note.

Due to the lack of significant macroeconomic news, gold looked to the currency markets for cues. The euro earlier fell to an intraday low of 1.3169 against the US dollar but has since rebounded to 1.3226.

“Adding to the negative mood in gold was a sharp rise in benchmark 10-year US Treasury yields, which have gained more than a third of a percentage point in less than a week,” MKS Finanace SA said.

Meanwhile, gold holdings in exchange-traded funds (ETFs) dropped by about 56,000 ounces to 70.843 million ounces on Tuesday, the largest one-day outflow in over two-months.

This change in direction reflects investors' desire to hold riskier assets, such as equities, that profit strongly from an upswing in the business cycle, MKS said.

Elsewhere, an estimated 90 percent of India's 300,000 jewellers closed their shops for a fourth day in protest of a government plan to double gold coin and bar import duties to four percent.

Equity markets are down across the board but have come off the morning lows. The Dow Jones industrial average and S&P 500 were last off 0.42 percent and 0.25 percent respectively.

Stocks and industrial commodities moved lower on worries that growth in China might soon slow. Ian Ashby, president of BHP's iron ore division, reportedly said that Chinese iron ore year-on-year demand growth could fall to single digits as its economy cools off in the coming months.

Comex copper for May delivery ended down 7.85 cents at $3.8305 per pound, while light sweet crude (WTI) oil futures on the Nymex were last at $105.61 per barrel, $2.48 or 2.29 percent.

As for the other precious metals, Comex silver for May delivery closed down $1.121 at $31.834 an ounce. Trade has ranged from $31.750 to $32.960.

Platinum futures for April delivery on the Nymex ended down $30.40 at $1,654.30 an ounce, while June palladium finished at $697.05 an ounce, down $10.55.

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