NEW YORK/LONDON (Reuters) - Gold eased on Monday in very thin trade, pressured by weaker crude oil prices and a lack of safe-haven demand as investors digested what elections in Europe will mean for the region’s debilitating debt crisis.
Bullion was dragged down by oil and the euro’s tumble after election results in France and Greece reflected strong anti-austerity sentiment, renewing European sovereign debt fears and anxiety about anemic economic growth and petroleum demand.
However, the metal, which largely followed the performance in riskier assets so far this year, stayed lower even though the single currency, oil and equities recovered from early session lows.<USD/>.N<O/R>
Trading volume was very low in U.S. gold futures after a strong run of U.S. economic data and fading hopes of further monetary easing by the Federal Reserve prompted some investors to reduce their bullish position.
“Gold is suffering from a lack of participation right now, which is not a good thing in my view. The market looks vulnerable from a technical standpoint,” said Bill O‘Neill, partner of commodities wealth manager LOGIC Advisors.
Spot gold was down 0.3 percent at $1,636.80 an ounce by 2:13 p.m. EDT (1813 GMT), recouping early losses after hitting a session low at $1,632.98.
O‘Neill said recent lows at the $1,630 area should provide technical support, and the metal could rebound if it held above that resistance level.
U.S. gold futures for June delivery settled down $6.10 an ounce at $1,639.10, with trading volume about 40 percent below its 30-day average, preliminary Reuters data showed.
Editing by Marguerita Choy