Gold prices slipped on Tuesday to their lowest in more than three weeks as waning concerns about a global economic slowdown lifted equities to multi-month highs, denting the precious metal’s safe-haven appeal.
Spot gold was down 0.1 per cent at 1,286.41 dollar per ounce by 0732 GMT, after touching its lowest since March 7 at 1,284.76 dollar earlier in the session. U.S. gold futures fell about 0.2 per cent to 1,291.40 dollar an ounce.
“Concerns we saw emerge in the past few weeks around economic growth has certainly eased and that shift (in sentiment) in the past day or two resulted in little bit of selling in gold market,” ANZ analyst Daniel Hynes said.
“Most of the global growth is coming from China and the (Chinese) data over the weekend eased those concerns.”
Strong manufacturing data from the United States and China triggered a massive sell-off in the U.S. bond market on Monday, which in turn lifted Asian equities to seven-month highs.
Market participants are now looking ahead to the U.S. nonfarm payroll data, due this Friday, for details on the economy’s performance.
Investors are also keeping a close watch on the Sino-U.S. trade negotiations, set to resume later this week in Washington with a Chinese delegation led by Vice Premier Liu He.
Strong payroll data tends to boost the dollar, while any positive developments from the trade talks would further increase investors’ appetite for riskier assets, both negative for gold.
The dollar index, which tracks the greenback against key rivals, was trading close to a three-week high posted on Monday. A stronger dollar makes gold expensive for holders of other currencies.
Indicating investor sentiment for bullion, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 1.5 per cent on Monday, its biggest one-day percentage decline in a month.
On the technical front, 1,275 dollar to 1,280 dollar an ounce level remains the key longer-term support for gold, according to an OANDA note.
The metal is currently trading above the 100-day moving average of around 1,281 dollar per ounce. Speculators who trade on technical signals regard a break below key moving averages as a bearish sign.
Among other precious metals, spot palladium was down 0.1 per cent at 1,417.94 dollar an ounce, after rising the most since late February in the previous session.
Silver slipped 0.5 per cent to 15.03 dollar per ounce, while platinum dipped 0.2 per cent to 845.53 dollars.
