Trade Resources Economy Gold Futures Fall on Traders' Technical Selling

Gold Futures Fall on Traders' Technical Selling

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday as technical elements put pressure on the precious metal.

The most active gold contract for April delivery fell 4.9 U.S. dollars, or 0.39 percent, to settle at 1,253.90 dollars per ounce.

Gold was put under pressure as it neared a key resistance level after rising for three sessions in a row. Analysts note that safe haven demand had previously seen a comeback and that gold's fall on Tuesday was minimal because of support from weakness equities and the U.S. dollar. The same analysts point to weakness in those two as nervousness in the market over a scheduled speech by U.S. President Donald Trump on Tuesday evening, after the market's close.

It is worth examining the chances for a Fed rate hike before the scheduled Trump speech on Tuesday, for reference later in the week. Investors believe the Fed may raise rates from 0.75 to 1.00 during the May FOMC meeting at the earliest.

According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 35 percent at the March meeting and 57 percent for the May meeting.

The U.S. Dow Jones Industrial Average fell by 33.97 points, or 0.16 percent as of 1810 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Gold was given support as a report released by the U.S. Department of Commerce on Tuesday showed gross domestic product increasing by a worse-than-expected 1.9 percent during the fourth quarter of 2016. Expectations were for a 2.1 percent increase. Analysts noted some strength in other parts of the measure, with consumer spending increasing by 0.5 percent to a 3.0 rate.

Investors are waiting for several key economic reports this week. The personal income and outlays is due on Wednesday, weekly jobless claims is due on Thursday, and Friday will see several Fed officials giving speeches, including Fed Chair Janet Yellen.

Silver for May delivery rose 5.2 cents, or 0.28 percent, to close at 18.469 dollars per ounce. Platinum for April delivery dropped 7.9 dollars, or 0.76 percent, to close at 1,031.00 dollars per ounce.

Source: Xinhua
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Gold Futures Fall on Traders' Technical Selling
Topics: Metallurgy