IV:Gold extends losses to hit 4-week low amid weak technical outlook
Investing.com - Gold futures extended heavy losses from the previous session to hit a four-week low during European morning hours on Wednesday, as investors continued to sell the precious metal amid a weak technical outlook.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,566.45 a troy ounce during European morning trade, down 0.6% on the day.
Comex gold prices fell by as much as 0.8% earlier in the session to hit a daily low of USD1,563.85 a troy ounce the weakest level since March 8.
Gold prices were likely to find support at USD1,554.80 a troy ounce, the low from February 21 and resistance at USD1,608.25, the high from March 28.
Gold futures fell more than 1% on Tuesday as a bout of technical selling kicked in after prices broke below key support levels, triggering fresh sell orders amid bearish chart signals.
Gold could see further losses in the near-term, with market analysts warning of a possible move towards the USD1,550-level.
Gold’s losses also came as market players opted for U.S. equities over the precious metal amid hopes that the economic recovery in the U.S. is gaining momentum.
The Dow Industrials and the S&P 500 both hit fresh record highs Tuesday, following a stronger-than-expected increase in factory orders in February.
Market players looked ahead to Friday’s highly-anticipated U.S. monthly jobs report to further asses the strength of the country’s economy and the need for further stimulus from the Federal Reserve.
Any improvement in the U.S. economy could scale back expectations for additional easing by the Fed, boosting the U.S. dollar and weighing on dollar-denominated commodities.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
Gold traders also awaited the European Central Bank's policy-setting meeting on Thursday for further hints on the future of its monetary policy.
Sentiment on the euro remained fragile amid ongoing concerns over the situation in Cyprus and ongoing political uncertainty in Italy.
Elsewhere on the Comex, silver for May delivery lost 1% to trade at USD26.96 a troy ounce, the lowest level since July 25, while copper for May delivery fell 0.6% to trade at a seven-month low of USD3.350 a pound.
