Gold futures give back nearly half of recent gains

Gold futures on the COMEX division of the New York Mercantile Exchange ended lower on Tuesday, losing almost half of what they gained a day earlier amid a drop in tensions over Ukraine.

The most active gold contract for April delivery fell 12.4 U.S. dollars, or 0.92 percent, to settle at 1,337.9 dollars per ounce. A day earlier, gold futures surged more than 2 percent, scoring their highest close since late October, as investors fled equities in face of the escalating crisis in Ukraine.

According to market analysts, while rising geopolitical tensions tend to generate safe-haven flows into gold market, riskier assets tend to become more attractive when those same tensions diminish over Ukraine.

Russian troops participating in military exercises in western and central Russia were ordered to return to their bases later this week, although Russian President Vladimir Putin on Tuesday called the ouster of the former Ukrainian leadership an unconstitutional coup and said Russia reserves the right to exercise force in Ukraine, reports say.

Looking ahead, some analysts believe, physical market demand in the emerging world will largely define gold's price movements this year, with China alone probably absorbing the equivalent of half of the world's gold mine production.

Silver for May delivery fell 26.3 cents, or 1.22 percent, to close at 21.222 dollars per ounce.