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Gold declined markedly amid hopes of avoiding conflict between the new government of Greece and its international lenders.
Appetite for safe assets weakened after the Greek government signaled plans to revise the terms of the debt with its creditors, departing from the requirements to take them off.
Greek Finance Minister Janis Varufakis suggested "list of debt swaps" to ease the debt burden of the country, according to which creditors are invited to exchange debt for new bonds tied to economic growth.
This offer is easing concerns over a conflict that could lead to a Greek exit from the euro zone.
On Tuesday, the main stock index in Athens jumped more than 8%, providing significant support to the growth of European equities. Yields on 10-year Greek government bonds also fell sharply.
Gold rose early in the session, as optimism about the US economy weakened when data released on Monday showed that consumer spending in the country fell in December at the fastest pace since September 2009, undermining optimism about the health of the US economy.
A separate report showed that construction spending in the US rose in December, less than expected, while industrial production growth slowed.
Last week, another report showed that in the fourth quarter, the US economy grew less than expected by 2.6% after 5.0% in the previous quarter.
Today in the US were published data on factory orders. The number of production orders declined significantly at the end of December, registering with the fifth consecutive monthly fall. At the same time the cost of business drop was less than previously estimated, and it should support the sector in the coming months.
Ministry of Commerce announced new orders for manufactured goods fell by 3.4 percent due to a drop in demand in the industrial sector.
Market participants are also preparing for Friday's report on employment in the US non-farm payrolls to obtain additional information regarding the strength of the recovery in the labor market.
Analysts predict that in January, the US economy added 231,000 jobs in December after 252,000, while the unemployment rate is projected to remain unchanged at 5.6%.
Strong employment rates in the non-agricultural sector, are likely to increase speculation about the timing recovery rates by the Federal Reserve System, while the weak values can contribute to the growth of gold, weakening incentives for early recovery rates.
April futures price of gold on the COMEX today fell to 1256.50 dollars per ounce.
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