Gold erased early gains on Tuesday to tumble to a six-week low as selling precipitated by a sharp rebound in equities pushed the metal through key technical support levels near $1,200 an ounce.
Spot gold slipped as low as $1,189.55 an ounce and was bid at $1,192.00 an ounce at 1409 GMT, against $1,206.95 late in New York on Monday. U.S. gold futures for August delivery fell $14.80 an ounce to $1,192.90.

The $1,200 mark is providing good support to gold, with physical demand emerging as prices slip further from June’s record $1,264.90. But its swift retreat from that level has knocked some investors’ confidence in the metal, traders said.

“The recent volatility is keeping a lot of people cautious,” said Afshin Nabavi, head of trading at MKS Finance. “But in my view, the world has not changed, politically or economically.

“But there are physical-related buyers looking for bargains,” he added. “So let’s see who is going to win.”