Gold prices fell Tuesday on a lack of Asian demand for bullion and investor discouragement that four consecutive daily efforts to push the price convincingly above the mid-$1,700s failed.

Since Wednesday of last week the most actively traded contract on the Comex has reached highs in the mid-$1,700s, only to end each session lower. The effort failed again Monday, and late in the day's session investors decided the best course would be to step back until gold's decline unveiled fresh support, perhaps in the high $1,600s.

Further, physical demand for gold from China and India, the world's largest buyer, weighed on the price. Demand for bullion in India has moderated on rupee weakness that makes gold more expensive.

Gold's performance was wholly uninspiring yesterday: The metal's inability to push above $1750, in tandem with poor physical demand, is creating little impetus for investors to load up ahead of Friday's EU summit, said London-based UBS analyst Edel Tully.

Tuesday's gold price decline comes three days before a critical European Union summit designed to get eurozone member states to surrender fiscal sovereignty to a central authority to prevent future sovereign debt crises.

Standard & Poor's on Monday stunned markets by threatening to downgrade 15 eurozone nations' credit ratings if Friday's summit fails. That sent European equities tumbling early Tuesday from five-week highs, and added to selling pressure on gold.

Liquidity strains may also be suppressing gold's price.

Part of gold's weakness can also be explained by persistently low lease rates, HSBC Securities analyst James Steel said in a note. Gold lease rates continued to slide, with one-month rates now at -0.55 percent. The decline in lease rates is evidence of heavy lending of gold by financial institutions, notably but not exclusively European banks. The need for institutions to lend gold for dollars shows there is still a liquidity squeeze. Until this eases, gold may stay on the defensive.

Gold for February delivery declined $10.60 to $1,723.90, while gold for immediate delivery fell $20.10 to $1,720.93.

Silver for March delivery was off 25 cents to $32.12, while silver for immediate delivery gave up 63 cents to $32.04.