Gold retreats before Spanish debt auction

Gold continued its drop for a third session on Tuesday trading amid worries in markets before awaited Spanish bond selling today.

The yellow metal remained under pressure yesterday after Spanish 10-year notes yield breached 6%, thus coming close to levels which forced Greece, Portugal and Ireland to resort to international bailouts.

Also, the Spanish cost of insuring against default, known as Credit Default Swaps (CDS), resumed its soar to yesterday 523 basis points from 499 basis points on Friday.

Spanish minister urged the European Central Bank to intervene to halt the rise in cost of borrowing, while Spanish Prime Minister Mariano Rajoy said his country must cut budget shortfall to continue having access to financing.

The Spanish treasury is set to sell 12- and 18-month notes today, while on April 19 it will auction 2014 and 2022 bills.

This week, euro area officials will seek global assistance when they conduct talks with the IMF in Washington.

Regarding fundamentals, German ZEW survey economic sentiment is predicted to retreat to 19.0 in April from 22.3 in March, while later in the day the main focus will be directed to U.S. housing and industrial production data.

In the FX market, the U.S. dollar showed slight advance against a basket of major currencies as depicted by the dollar index, after facing strong resistance at 76.60, which represents SMA level, pushing it to 79.55, where the retreat below support of 80.00 yesterday caused to the dollar to close on losses.

Precious gold is currently trading around $1648.30 an ounce while it recorded a high of $1652.74 and a low of $1645.14.

Technically speaking, the shiny metal managed to find solid support at $1640 levels on Monday and thus may rest upon it today.

Crude oil for May's delivery is meanwhile showing a drop to trade around $102.98 a barrel after opening today's trades at $103.11.