Gold eased on Tuesday as safe-haven bids retreated after oil prices steadied and equities edged higher, while uncertainty over U.S. monetary policy also weighed.
Spot gold XAU= had fallen 0.3 percent to $1,228.02 an ounce by 0045 GMT, after dropping 0.2 percent overnight.
World stock markets rose on Monday and the Dow Jones industrial average closed above 18,000 for the first time since July. [MKTS/GLOB]
Dovish comment from a U.S. Federal Reserve official did not help gold. The Fed is set to hike interest rates more rapidly than investors currently expect, Boston Fed President Eric Rosengren said on Monday, again pushing back on what he said was investors' too pessimistic view of the U.S. economy and monetary policy.
Citi Research looks for gold to remain underpinned in the current quarter but cautions that strength could abate later in the year.
Citi believes current price momentum may begin to ease after this quarter, averaging $1,200 an ounce for the year as a whole.
Under its base scenario, Citi sees gold averaging $1,250 this quarter, $1,210 in the third quarter and $1,150 in the fourth quarter.
Gold prices ended the U.S. day session near unchanged levels Monday. Some early safe-haven demand gave way to some selling pressure tied to a mild rally in the U.S. stock indexes. A lower U.S. dollar index Monday did work to limit the selling interest in the precious metals markets. June Comex gold was last up $1.10 at $1,235.70 an ounce. May Comex silver was last down $0.048 at $16.265 an ounce.
Technically, June gold futures prices closed nearer the session low. The gold bulls still have the overall near-term technical advantage but trading has been choppy recently. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the April week’s high of $1,264.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of 1,207.70. First resistance is seen at today’s high of $1,243.30 and then at $1,250.00. First support is seen at last week’s low of $1,225.40 and then at $1,220.00. Wyckoff’s Market Rating: 6.0
Reference: Kitco, Reuters, Scrapregister
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