Investing.com - Gold futures edged modestly higher during European morning hours on Wednesday, as market players awaited the release of the minutes from the Federal Reserve's policy-setting meeting last month.
Gains were limited as investors stuck to the sidelines amid a weak technical picture.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,604.80 a troy ounce during European morning trade, up 0.1% on the day.
Prices held in a tight trading range between USD1,609.00 a troy ounce, the daily high and a session low of USD1,603.90 a troy ounce. Gold futures fell to a six-month low of USD1,598.25 a troy ounce on February 15.
Gold prices were likely to find support at USD1,590.25 a troy ounce, the low from August 15 and near-term resistance at USD1,635.95, February 15’s high.
Gold traders looked ahead to the release of the minutes of the Federal Reserve’s January meeting later in the session for hints regarding the central bank’s attitude towards monetary policy.
Any policy pause signal from the Fed minutes may send the U.S. dollar higher, pressuring dollar-denominated commodities, including gold.
U.S. housing data due later in the day will also be in focus as investors seek more cues on the country's economic health.
Any improvement in the U.S. economy could scale back expectations for further easing from the Fed.
Meanwhile, a weak technical picture continued to weigh on the precious metal as investors remained hesitant to enter the market and open fresh long positions amid bearish chart signals.
Gold prices fell below the key USD1,600-level for the first time since August last week, as a bout of technical selling set in after futures broke through key support levels, triggering a flurry of sell orders.
From a technical standpoint, gold could see further losses, with market analysts warning of a possible move towards the USD1,550-level.
Gains in U.S. equities have further dimmed the appeal of the precious metal in recent weeks.
The S&P 500 Index finished Tuesday at the highest level since 2007. The benchmark is less than 5% below its all-time high reached in October 2007, while the Dow Jones Industrial Average is about 3% from its record high.
The S&P 500 has rallied nearly 7% in 2013, while gold has lost approximately 4%.
The precious metal’s safe-haven appeal has waned in recent weeks amid easing concerns over the global economic outlook.
Elsewhere on the Comex, silver for March delivery added 0.25% to trade at USD29.49 a troy ounce, while copper for March delivery eased up 0.2% to trade at USD3.657 a pound.
