Gold futures on Tuesday were down sharply as the U.S. dollar got off to a strong start, pressuring the commodity priced in the currency after modest gains in the previous session.

Commodity traders speculated that the yellow metal could also be facing some resistance after prices punched above $1,700 as a plunge in crude-oil prices sparked some investors to flee to the perceived safety of bullion.

Gold for June delivery on Comex was down $27.90, or 1.6%. at $1,683.30 an ounce, following a 0.7% gain on Monday. May silver meanwhile, tumbled 70 cents, or 4.4%. at $14.92 an ounce, after the white metal surged 2% in the previous session.

The downbeat trade in precious metals comes as the U.S. dollar was up 0.4% against a basket of a half-dozen currency rivals, as gauged by the ICE U.S. Dollar Index. A stronger dollar can make gold less desirable to buyers using other monetary units because the metal is typically traded in dollars.

Source : Marketwatch