Gold eased on Tuesday, falling below $1,300 an ounce, as signs of strengthening U.S. housing market data offset safe-haven bids from escalating tensions between Russia and the West.
As of 3:46 EST, gold for immediate delivery fell 0.48 percent or 6.18 points to trade at $ 1,290.46 an ounce after opening at $1,295.67, having earlier hit a high of $1,296.62, and a low of $1,288.95.
The metal failed to stabilize above $1,300.00 levels yesterday reducing positivity. Gold is expected to face resistance at $1,331.39 and support at $1.268.23.
Dollar slides after strong US housing data
Monday's U.S. data releases showed contracts to buy previously owned homes rose in March for the first time in nine months, a sign the housing market could be stabilizing after suffering a setback in previous months.
Investors are now looking for U.S. jobs report and a Federal Reserve policy meeting due later this week to gauge further the strength of the world's largest economy and the central bank's stance on tightening monetary policy.
A strong economy means metal's safe-haven appeal would weaken, and the Fed could quicken its path towards normalizing its monetary policy. The U.S. central bank has already been slowing the pace of its bond purchases.
The dollar traded sharply lower on Tuesday, extending weekly session to trade at 79.68 after opening at 79.76. The USDIX index so far hit an intraday high at 79.78 and low at 79.65.
Strong data offsets Ukraine tension
Meanwhile, tensions between the West and Russia over ongoing unrest Ukraine remained high after the United States imposed new sanctions on seven powerful Russians close allies of Russian President Vladimir Putin and also sanctioned 17 Russian companies in reprisal for Moscow`s actions in Ukraine.
On Monday, the United States announced further sanctions against seven top Russian officials with links to President Vladimir Putin, including freezing their assets and banning them from obtaining U.S. visas, while the European Union (EU) added 15 more Russians and Ukrainians to their blacklist and will reveal them today.
Gold prices rose sharply to a one and a half week high on Monday, as the escalating crisis in Ukraine boosted the metal`s safe-haven status after hints the United States and the European Union (EU) are ready to step up sanctions on Russia.
In general, signs of escalating violence between Ukrainian forces and pro-Russian militants sent gold trading above $1,300 an ounce, yet the Ukraine-Russia political tension has taken a backseat this week for gold as the focus is now on the Fed meeting and other data releases.
Moving to other metals:
- Spot silver fell 0.92% to trade around $ 19.40
- Spot platinum lost 0.30% to $ 1,414.00
- Spot palladium declined 0.41 % down to $ 797.05