Gold hit a three-week low on Thursday, after falling more than 1 percent in the previous session, as equities rose and with investors eyeing a European Central Bank meeting later in the day amid rising expectations rise for a USA interest rate hike.
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Asian stocks climbed to nine-month highs on Thursday, helped by a pickup in capital inflows and a recovery in global oil prices, while the dollar stood strong on US equity market gains. Prices earlier touched $1,313.30, the lowest level for a most-active contract since June 29. Bullion fell 1.2 percent on Wednesday.
U.S. gold futures settled down one per cent at $US1,319.30 per ounce.
“Stock markets are moving up which is not good for gold”.
Spot silver fell 1.7 percent to $19.55 an ounce.
The Gold price has run out of directional energy, has found strong resistance somewhere 1375 level and now is approaching the 1303 static support, the price could increase again in the coming week if the Federal Reserve will have a dovish statement, another disappointment could ruin the Dollars, this situation could lift the Gold again. “Some expectations of a rate hike have come back”, said OCBC Bank analyst Barnabas Gan.
“In quiet conditions the gold market may gravitate to the vicinity of large round numbers, with $1,300/oz the closest and most obvious”.
The European Central Bank is all but certain to keep rates firmly on hold on Thursday but will have to address an ever growing list of obstacles that threaten once again to derail its efforts to revive growth and inflation.
“With gold looking increasingly shaky on the charts, all eyes will turn to the European Central Bank policy meeting”. Prices are down for a fifth straight session, the longest streak since November 13.
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Gold has fallen to its lowest level in three weeks as equities rose and the U.S. dollar hit a four-month high following strong USA economic data, which raised expectations the Federal Reserve may raise interest rates before the end of the year. USA gold was down 0.1 percent at $1,317.50 an ounce.
