Gold prices fell sharply on Wednesday in U.S. trading, following the direction of crude oil. The precious metal to its lowest level since Christmas Eve and crossed below its 10 and 20-day moving averages.
December gold finished the session at $841.70, down $24.30 for the session. The metal hit as low as $836.00 in intraday trading after touching as high as $867.80 earlier in the day.
A drop in oil prices reduced gold's hedge appeal. Crude plunged $5.95 a barrel to finish at $42.63 on Wednesday. The plunge came after Energy Information Administration data showed a much greater than expected increase in weekly inventories.
Gold's losses were limited as the U.S. dollar turned to the downside against other major currencies. The greenback fell away from a multi-week high against the euro and reached its lowest level in nearly three weeks versus the pound.
On the economic front, an Automatic Data Processing report showed that non-farm private employment fell by 693,000 jobs in December following a revised decrease of 476,000 jobs in November. Economists had been expecting the report to show a somewhat more modest decrease of about 450,000 jobs.
Gold turned higher on Tuesday after plunging below $840 in early trading. February gold finished at $866.20, up $8.40 on the day. The metal hit a low of $838.80 before turning higher.
