Gold fell back below US$1,270 (RM 5,093.65) an ounce today as a strengthening dollar prompted some buyers to cash in gains after the metal posted its biggest daily rise this month in the previous session. Federal Reserve is unlikely to raise interest rates at its next meeting in June should help gold find strong support at $1,250 an ounce, said OCBC Bank analyst Barnabas Gan.
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Spot gold was down 0.7 percent at $1,268.13 an ounce at 0930 GMT, while USA gold futures for June delivery were down $5.60 at $1,269.80.
GoldThe precious metal was given support as USA equities showed extensive weakness.
U.S. gold for June delivery GCcv1 slipped 0.3 percent to $1,267.40 an ounce.
The U.S currency had already received a boost overnight when two Fed officials said the central bank should raise rates if data points to an improving economy. Rising rates increase the opportunity cost of holding non-yielding gold.
The precious metal was put under further pressure as the retail sales report released by the U.S. Department of Commerce on Friday showed consumer spending better-than-expected, increasing by 1.3 percent.
In macro news, the latest World Gold Council report showed gold demand hit 1,290 tonnes in the first quarter, up 21 percent year-on-year and the second-largest total on record. USA stock indexes were weaker in afternoon trading Wednesday. Technical analysts at ScotiaMocatta said their view on gold is neutral so long as it trades between the $1,303 resistance level and the $1,256 support. Still, gold has gained more than 19% in 2016 after a series of weak economic data in the U.S. and elsewhere eased the expectation of a near-term increase in United States interest rates.
Spot silver (XAG=) advanced 0.6 percent to $17.07 an ounce, platinum (XPT=) was up 0.4 percent at $1,047.66 and palladium (XPD=) was down 0.7 percent at $588.72.
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The dollar was up for a fourth week in five against a basket of major currencies.DXY, making dollar-denominated assets such as gold more costly for holders of other currencies.
