Gold under pressure before Spanish debt auction

Gold remains under pressure for the fourth consecutive session on Thursday trading before the Spanish government auctions 2.5 billion euros in two- and 10-year notes later in the day.

The auction will be carefully watched amid the heightened tensions stemming from Spain's fiscal and banking sector problems which raised speculations the debt crisis will be reignited.

Worries increased this week after Spanish 10-year bond yield rose above 6%, thus coming close to levels which forced some euro area nations, more specifically Greece, Portugal and Ireland, to ask for international bailouts, while Spanish CDS rose to record high.

Also, an auction on Tuesday although saw a rise in demand yet it witnessed a soar in borrowing cost.

Yesterday, ECB policymaker Jens Weidmann said Spain should not depend on the ECB's intervention through buying Spanish debt to tame the soaring bond yields.

Moreover, today eyes will also track a French debt auction which aims to gather 8 billion euros of 2014 and 2017 bills, in addition to 3 billion euros in 2018 bonds.

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

The yellow metal is currently trading around $1642.74 an ounce after finding support for the third day at $1640 level, which suggests that a breach of that level and a daily closing below could provoke further losses for the shiny metal. The day's high was recorded at $1644.22 and the low was seen at $1636.64.

In the FX market, the U.S. dollar inched down against a basket of major currencies as depicted by the dollar index, after facing strong resistance at 76.60, which represents SMA level, where it is currently hovering around 79.55 compared with the day's opening of 79.57.

Crude oil for May's delivery is meanwhile showing a rise to trade around $102.80 a barrel after opening today's trades at $102.72.