Gold futures drop over 2 pct on Tuesday

Gold futures on the COMEX division of the New York Mercantile Exchange dropped more than 2 percent on Tuesday, giving back the previous day's gains due to profit-taking.

The most active gold contract for June delivery fell 27.2 U.S. dollars, or 2.05 percent, to settle at 1,300.3 dollars per ounce, erasing an 8.5-dollar gain from Monday, when prices closed at a three-week high.

The fall in gold was due to profit-taking before the Easter holiday, according to some market analysts, noting that huge long positions were created on Monday as gold managed to trade over 1, 320 dollars per ounce.

Also overall strength in the U.S. dollar put pressure on dollar- denominated metals prices. The ICE dollar index trades higher so far for the week, following an advance Monday after better-than- expected U.S. retail sales.

The situation in eastern Ukraine failed to attract any safe- haven buying for gold. Some analysts believe, investors are bored with the Ukraine. It will probably take more ruthless news to see a significant reaction that would result in a flee to gold for safety.

The World Gold Council said Tuesday that following record Chinese gold demand in 2013, this year is likely to be a year of consolidation. But medium-term demand for gold bars and coins could reach close to 500 metric tons by 2017, a rise of nearly 25 percent above its record level last year.

Silver for May delivery fell 52.1 cents, or 2.60 percent, to close at 19.489 dollars per ounce.