Gold futures little changed after Monday’s big rally

Gold futures were little changed in rangebound trade on Tuesday, amid speculation the Federal Reserve won't alter its aggressive monetary easing until it is convinced the economy's gains can be sustained.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,332.35 a troy ounce during European morning hours, down 0.25% on the day.

Comex gold prices held in a range between USD1,328.35 a troy ounce, the daily low and a session high of USD1,337.65 a troy ounce.

Gold futures were likely to find support at USD1,269.45 a troy ounce, the low from July 17 and resistance at USD1,347.45, the high from June 20.

Comex gold surged 2% on Monday to hit a one-month high of USD1,338.45 a troy ounce, as a bout of technical buying kicked in after prices broke above a key resistance level.

A broadly weaker U.S. dollar also contributed to gains, following the release of disappointing U.S. housing sector data on Monday.

The dollar index fell sharply after data showing that U.S. existing home sales fell unexpectedly in June dampened expectations that the Federal Reserve will start scaling back its asset purchase program this year.

Fed Chairman Ben Bernanke said last week that the pace of its bond purchases would depend on U.S. economic health.

Sentiment on the precious metal has been upbeat ever since comments by Fed Chairman Ben Bernanke last week eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future.

Bernanke said that the pace of the central bank’s bond purchases are not a “preset course”.

The Fed chief reiterated that the central bank will continue to maintain its accommodative monetary policy for the foreseeable future.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

The precious metal is on track to post a loss of 20% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies. 

Elsewhere on the Comex, silver for September delivery fell 1% to trade at USD20.30 a troy ounce, while copper for September delivery shed 0.3% to trade at USD3.176 a pound.