Gold slightly changed but may face downward pressure

The shiny metal little changed today after yesterday's drop as the dollar halted its fall which reduced demand on the metal as an alternative investment.

Yesterday, gold shed $10.70 or 0.94% to close at $1122.29 an ounce. Gold Price was setin London on Monday at $1134.00 per ounce during the PM fixing inclining from $1125.75 at the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, remained at 1,116.12 metric tons on March 8.

Today, the metal may continue its fall after head of the State Administration of Foreign Exchange, Yi Gang, said China, which increased its reserves by 454 tons to 1,054 tons since nearly 7 years, will not buy gold as a component of its official reserves. In fact, one of the main reasons that helped gold prices to jump to a new record last year is the buying by central banks to gold as a reserve, but now there may be a sell again which is expected to affect prices.

Gold received support from Greece's concerns which enhanced demand on the yellow metal as a safe haven. Movements today are in narrow range due to absence of important fundamentals from major economies; however, the main focus today is going to be on the Greek Prime Minister's meeting with President Obama in his tour to seek assistance for his debt-laden country.

Meanwhile, the inverse relation between gold and dollar is showing weakness but still it is gaining direction from the green currency. The U.S. dollar surged on Tuesday versus a basket of major currencies, as indicated by the dollar index, which inclined to 80.84 from the day's opening at 80.42.

Spot gold is traded at $1122.55 an ounce after recording a high of $1124.95 and a low of $111.70. With regard to other precious metals, platinum edged up to $1590.50 from the day's opening at $1585.20; palladium soared to $466.00 from $463.20; and silver inched up to $17.18 from $17.16, as of 08:45 GMT.