• Spot gold dropped 0.7 percent at $1,343.84 per ounce by 1:40 p.m. EDT (1740 GMT), after touching $1,356.66, its highest since Feb. 16.
• U.S. gold April futures settled down $13, or 1 percent, at $1,342 per ounce.
• Gold fell on Tuesday after hitting a near six-week high as the U.S. dollar rose and risk appetite revived in global financial markets, but the precious metal remained underpinned by an array of geopolitical tensions.
• The U.S. dollar rose versus a currency basket, as returning risk appetite dented investor appetite for the U.S. currency. A stronger dollar makes dollar-priced gold costlier for non-U.S. investors.
• Stock markets jumped in response to reports the United States and China were negotiating to avert a trade war, denting gold's appeal as a safe haven.
• "There's going to be a few months of talks before uncertainty around the global trade situation can be erased, and in the meantime gold will at times benefit," said Simona Gambarini, commodities economist at Capital Economics.
"In the short term we definitely see gains (for gold)."
• Technically, April gold futures prices closed nearer the session low today. Prices also scored a bearish “outside day” down on the daily bar chart. The gold bulls still have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,370.50. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,320.00. First resistance is seen at $1,350.00 and then at today’s high of $1,356.80. First support is seen at today’s low of $1,339.60 and then at $1,335.00. Wyckoff's Market Rating: 6.0
• Market participants are looking ahead to key data, after new U.S. Federal Reserve Chairman Jerome Powell last week said the U.S. economy does not appear to be running hot.
• However, the core personal consumption expenditures index, the Fed's preferred inflation measure, could potentially make a larger impact, said Tyler Richey of investment firm Sevens Report.
"If it edged up towards 2 percent, that could really shake the market just like when it was hit back in February," he said.
• Meanwhile, spot silver lost 0.7 percent at $16.54 per ounce after hitting a near three-week high of $16.80.
Platinum dropped 1.1 percent at $941.99 per ounce, hitting $935, its lowest since Jan. 3. Palladium increased 0.1 percent at $974.50 per ounce.
Reference: Reuters, Kitco
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