By Frank Tang and Jan Harvey
NEW YORK/LONDON | Tue Mar 6, 2012 3:53pm EST
(Reuters) – Gold fell 2 percent in heavy volume on Tuesday, breaching technical support as investors worried more about a possible Greek default, but some analysts said the metal looked oversold and was poised for a rebound.
Silver fell 3.5 percent, and platinum and palladium posted their largest daily declines this year, as investors grew more cautious about the global economic outlook a day after China cut its growth forecast and data showed the European Union was not likely to avoid a recession.
Bullion broke below its 200-day moving average for the first time since mid-January, tracking U.S. equities’ slide on worries Greece could miss a deadline to complete a bond swap that is part of a bailout and restructuring deal to avert a default.
Gold investors were already cautious after the precious metal tumbled 5 percent last Wednesday on dimmer near-term prospects for another round of quantitative easing from the U.S. Federal Reserve. Gold rebounded to near $1,660 an ounce but investors remained uneasy.
“People who are long gold are getting out. They don’t like what’s going on with Greece and the stock market is decisively lower. It’s a matter of raising money,” said Jonathan Jossen, COMEX gold options floor trader.
“But the bullish option flow usually tells me we could be near a bottom,” Jossen said.
Spot gold was down 2.1 percent at $1,670.41 an ounce by 2:52 PM EST (1952 GMT) , having hit a six-week low of $1,663.95.
U.S. gold futures for April delivery settled down $31.80 at $1,672.10.
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