Gold dipped in early Asia on Wednesday with the focus on China prices data and an upcoming European Central Bank review of interest rates.
The precious metal came under pressure as the U.S. stocks settled higher, dulling the investment appeal for gold. The U.S. stocks ended higher Wednesday after wavering in a tight range, as investor sentiment was buoyed by a solid rebound in oil prices.
Gold was prevented from falling further as the U.S. Dollar Index, a measure of the dollar against a basket of major currencies, fell on Wednesday. Gold and the dollar typically move in opposite directions.
With no other economic data due out this week, traders awaited the U.S. Federal Reserve's meeting next week for further hints on its rate policies. Analysts believed that a delay in the U.S. Federal Reserve's rate hike remains inevitable due to economic instability.
Gold prices ended the U.S. day session modestly lower on some profit-taking from the shorter-term traders and on some technical chart consolidation. This backing and filling on the charts is not uncommon and is actually a healthy sign for the gold market bulls, as it suggests the price uptrend on the daily chart can continue. April Comex gold was last down $5.30 at $1,257.70 an ounce. May Comex silver was last down $0.02 at $15.37 an ounce.
Technically, April gold futures prices closed nearer the session high. Prices are still in a nearly three-month-old uptrend on the daily bar chart and bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,238.00. First resistance is seen at today’s high of $1,265.70 and then at last week’s high of $1,280.70. First support is seen at $1,250.00 and then at today’s low of $1,243.60. Wyckoff’s Market Rating: 7.5
Reference: Reuters, Investing, Kitco
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