· Gold prices fell on Wednesday to hover around a four-month low touched in the previous session, as the dollar gained after strong U.S. housing data dampened concerns about an economic slowdown in the country, amid upbeat risk appetite.
Spot gold was down 0.2 percent at $1,269.93 per ounce by 0602 GMT, having hit its lowest since the end of last year at $1,265.90 in the last session.
U.S. gold futures were 0.1-percent lower at $1,271.80 an ounce.
· “The major factor that is pressuring gold prices is the strength of the dollar, which is also pressuring physical demand,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
The dollar index hovered near a 22-month peak after data showed that sales of new single-family homes in the United States rose to a near 1-1/2-year high in March.
The data eased concerns about a slowdown in the world’s largest economy, right ahead of the release of U.S. GDP figures on Friday.
The United States is expected to beat analyst estimates of a 2.1 percent rate of growth with the Atlanta Federal Reserve’s GDPNow model projecting growth anywhere between 2.2 to 3.4 percent.
Such an event would lift global economic sentiment and support the dollar, analysts said.
· Gold prices were also pressured by recent uptick in global equities of late due to better-than-expected data and a supportive policy environment, providing a boost to risk appetite.
Both the Nasdaq and S&P indexes marked record closing highs in the previous session.500
· Gold dropped to its lowest this year in the last session, nearly percent away from its February peak of an ounce.6$1,346.73
· “Gold’s key support at was taken out some time ago, while compounding the negativity further is the fact that both the day and day moving averages have turned south as well,” INTL FCStone analyst Edward Meir wrote in a note.$1,28050-100-
“We continue to see a slow grind in gold for the moment, as there is very little that can make the case for a short-term upside swing. About the only thing we see is that the complex is somewhat oversold ... but even that is not in extreme territory.”
· Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, on Tuesday fell to tonnes, the lowest since Oct.749.6323.
· Gold is on the rounds near ahead of European open on Wednesday. The yellow metal dropped to the year’s low on Tuesday after global traders were welcomed by upbeat US data and rising equities when they returned from Easter break.$1269
Looking forward, risk events like Brexit, the US-China trade deal and geopolitical plays surrounding North Korea, Syria and Libya are likely to entertain the metal traders.
Gold Technical Analysis
Considering 12-day old descending trend-line, the bullion may extend its downside but an eight-month-long upward sloping support-line at$1263 might challenge bears, which if broken could recall $1260 and $1257 ahead of highlighting 200-day simple moving average (SMA) near$1250.
Meanwhile, $1273 trend-line resistance, $1278 and $1281 may limit the quote’s nearby upside, a break of which can shift buyers’ attention to100-day SMA level of $1291.
· In other metals, silver dropped percent to per ounce, after declining to its lowest level since Dec. at in the previous session.0.1$14.8126$14.71
Platinum was up 0.3 percent at $886.81 per ounce, while palladium was 0.2 percent lower at $1,387.30 per ounce.
Reference: Reuters, FX Street
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