Gold futures edged modestly lower during European morning trade on Wednesday, as investors were hesitant to buy into the market amid a weak technical outlook.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,671.15 a troy ounce during European morning trade, down 0.15% on the day.
Prices traded in a tight range between USD1,670.15 a troy ounce, the daily low and a session high of USD1,675.75 a troy ounce.
Gold prices were likely to find support at USD1,653.35 a troy ounce, the low from January 28 and near-term resistance at USD1,685.65, Tuesday’s high.
Gold prices came under pressure on Tuesday as a bout of technical selling kicked in after prices failed to break above a key resistance level.
Gold futures rallied to its 50-day moving-average close to the USD1,686-level but lacked momentum to move higher, triggering fresh sell orders amid bearish chart signals.
The precious metal’s safe-haven appeal has waned in recent weeks amid easing concerns over the global economic outlook.
A stronger dollar also contributed to losses. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.3% to trade at 79.82, the highest level since January 29.
Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.
Losses were limited amid indications of robust physical demand in China. On Tuesday, official data showed that China’s gold imports from Hong Kong rose to a monthly record of 114,405 kilograms.
Mainland China imported 834.5 metric tons, including scrap and coins, in 2012, 94% higher than the 431.2 metric tons imported in 2011
China was expected to displace India as the world’s biggest gold consumer last year, according to a recent forecast from the World Gold Council.
Gold traders are now looking ahead to the European Central Bank’s policy-setting meeting on Thursday, for further hints on the future of its monetary policy.
Elsewhere on the Comex, silver for March delivery fell 0.5% to trade at USD31.70 a troy ounce, while copper for March delivery dipped 0.2% to trade at USD3.762 a pound. -Investing.com