Gold futures declined on Tuesday in reaction to raised worries on latest lowered outlook on euro zone’s economic growth and downgraded credit rating for Japan. Fitch recently downgraded Japan’s rating to A+ on Tuesday. Fitch maintains its negative outlook on Japan’s credit rating due to high public debt levels. Further to create uncertainty among investors, the Organization for Economic Cooperation and Development also reduced its outlook for economic growth in the euro zone. The OECD expects the region’s GDP to decrease by 0.1 percent in 2012 however also forecasts that it will recover to 0.9 percent in 2013.

Gold futures contract for June delivery fell 0.8 percent or $12.10 to settle at $1,576.60 per ounce on the Comex division of the New York Mercantile Exchange. The precious metal also remained lower on Monday and was down by 0.2 percent. The US dollar also gained which exerted more pressure on the commodities.

The ICE dollar index DXY which tracks the US dollar’s movement versus its six major rival currencies surged to 81.468 on Tuesday as compared to 80.970 on Monday’s North American trading session. The US dollar is always negatively correlated with commodities as the higher dollar makes commodities more expensive for investors holding other currencies than the US dollar.

Among other base metals, copper futures contract for July delivery fell 0.4 percent or $0.02 to settle at $3.49 per pound while silver futures contract for the same month declined 0.5 percent or $0.14 to settle at $28.18 per ounce.

Platinum futures contract for July delivery plunged 0.2 percent or $3.10 to settle at $1,458.40 per ounce while palladium futures contract for June gained 0.8 percent or $4.75 to settle at $615.55 per ounce.