Gold resumes its drop before U.S. data and Fed statement

Gold continued its drop on Tuesday trading for the eighth consecutive session on political worries from Europe and ahead of important U.S. data and Fed statement.

In France, the main focus is on the French elections amid concerns the result may hamper European officials' efforts to ease the debt crisis, where the advance of the socialist candidate is raising concerns regarding France's commitment to austerity measures.

In Netherlands, Dutch Prime Minister tendered his government's resignation yesterday.

On the other hand, the main focus will be on U.S. consumer confidence and new home sales reports which will be followed by the Fed's statement on monetary policy in addition to the latest growth, unemployment and inflation forecast later in the week.

Investors will wait for any reference to quantitative easing, especially after the deterioration in the data released recently.

It is worth mentioning that the shiny metal reached its peak of $1790 on February 29 on possible stimulus by the Fed while it started dropping after the improvement in U.S. data.

In the FX market, the U.S. dollar slipped today against a basket of major currencies as depicted by the dollar index, yet it stopped dropping after finding support at 79.30, where the day's opening was at 79.38.

The green currency may remain under pressure till the Fed statement as announcing QE3 means excess supply in markets and thereby depreciation in value.

The yellow metal is currently trading around $1635.94 an ounce where it continued its drop after breaching support at $1640 yesterday yet it found support $1630 levels. The day's high was recorded at $1638.55 and the low was seen at $1633.90.

Crude oil for June's delivery is meanwhile showing a drop to trade around $103.00 a barrel after opening today's trades at $103.77.