Gold prices inch up off 4-month low, still pressured by strong dollar
By Brijesh Patel (Reuters) - Gold prices edged higher on Wednesday, recovering from a near four-month low touched in the previous session under pressure from a strong dollar, as U.S. stocks took a breather following a rally.
By Brijesh Patel
(Reuters) - Gold prices edged higher on Wednesday, recovering from a near four-month low touched in the previous session under pressure from a strong dollar, as U.S. stocks took a breather following a rally.
Spot gold was up 0.3 percent to $1,276.50 per ounce as of 1:35 p.m. EDT (1735 GMT), a day after hitting its lowest since Dec. 26 at $1,265.90.U.S. gold futures settled 0.5 percent higher at $1,279.40 an ounce.
This "insignificant move in gold is just a technical bounce from the hard sell-off yesterday," said David Meger, director of metals trading at High Ridge Futures.
U.S. stocks pulled back slightly after a record rally in the prior session. The dollar gained, near a 22-month high against its peers, denting bullion's appeal.
"A good portion of gold's weakness has come from recent highs in the dollar against major currencies, and lack of safe-heaven buying amidst equity markets continuing higher and slightly better global economic outlook." Meger said.
Recent data from the United States and China have assuaged fears of global downturn, dampening safe-haven demand for gold, which has fallen more than 5 percent from its 2019 peak touched in February.
Spot gold could hover above support at $1,264 an ounce or bounce toward resistance at $1,284, said Reuters technical analyst Wang Tao.
Investors now await release of U.S. GDP data this week. The Atlanta Federal Reserve's GDPNow model projects between 2.2 percent and 3.4 percent growth for the world's largest economy, which would beat analysts' estimates of 2.1 percent growth.
Reflecting bearish investor sentiment, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3 percent on Tuesday to 749.63 tonnes, the lowest since Oct. 23. SPDR Gold holdings have dipped about 5 percent this year.
However, the downside for prices was likely to be limited by increased central bank buying, "as well as positive signs that the physical market is recovering," analysts from Standard Chartered wrote in a note on Tuesday.
In other metals, silver gained 1 percent to $14.96 an ounce after touching its lowest since Dec. 26 at $14.71 in the previous session.
Platinum fell 0.5 percent to $880.47 per ounce, while palladium rose 1.7 percent to $1,414.42.
(Reporting by Brijesh Patel in Bengaluru; Editing by David Gregorio)
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