• Gold fell for a third day on Wednesday, set for its first monthly drop since December, as U.S. economic data boosted the case for an interest rate hike by the Federal Reserve next month.
Spot gold was down 0.3 percent to $1,259.51 per ounce at 0330 GMT. Prices fell by the same amount on Tuesday after earlier rising to a one-month high of $1,270.47. For the month, bullion is set to drop 0.6 percent.
• U.S. consumer spending recorded its biggest increase in four months in April and monthly inflation rebounded, pointing to improving domestic demand that could allow the Federal Reserve to raise interest rates next month.
• "U.S. employment data coming this Friday and its affects on the Fed rate hike decision next month will be crucial," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
Political tensions in the U.S. and Europe continue to support gold and have prevented any major losses for the metal, Ikemizu said.
• Interest rate futures on Tuesday are indicating a nearly 89 percent chance of a June hike, according to CME Group's FedWatch tool.
• Spot gold may break a support at $1,257 per ounce and fall to the next support at $1,245, according to Reuters technical analyst Wang Tao.
• "The extended short term long positioning and a lack of upside momentum may be signalling that a correction lower may be on the cards," said Jeffrey Halley, a senior market analyst at OANDA.
• In other precious metals, silver slipped 0.6 percent to $17.26 an ounce though it is set to rise 0.4 percent for the month.
Reference: Reuters
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