Investing.com - Gold’s losses deepened during U.S. morning hours on Wednesday, dropping below the key USD1,600-an-ounce mark as a bout of technical selling kicked in after prices broke below a key support level.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,591.70 a troy ounce during U.S. morning trade, down 0.8% on the day.
Prices fell by as much as 1% earlier in the day to hit a session low of USD1,588.30 a troy ounce, the weakest level since August 3.
Gold prices were likely to find near-term support at USD1,578.55 a troy ounce, the low from July 25 and resistance at USD1,618.70, February 18’s high.
Gold’s losses accelerated after prices went into a “death cross”, triggering fresh sell orders amid bearish chart signals. A “death cross” occurs when the 50-day moving average price falls below the 200-day moving average.
From a technical standpoint, gold could see further losses, with market analysts warning of a possible move towards the USD1,550-level.
Gold prices showed little reaction to the release of U.S. data on housing starts, building permits and producer prices.
The U.S. Commerce Department said that housing starts fell by 8.5% in January to a seasonally adjusted 0.890 million, compared to expectations for a decline of 3.6% to 0.925 million.
The report also showed that the number of building permits issued in January rose 1.8% to a seasonally adjusted 0.925 million, above expectations for a 1.2% increase to 0.915 million units.
A separate report showed that producer price inflation in the U.S. rose 0.2% in January, rising for the first time in four months.
Gold traders now looked ahead to the release of the minutes of the Federal Reserve’s January meeting later in the session for hints regarding the central bank’s attitude towards monetary policy.
Any policy pause signal from the Fed minutes may send the U.S. dollar higher, pressuring dollar-denominated commodities, including gold.
Elsewhere on the Comex, silver for March delivery fell 1.3% to trade at a six-month low of USD29.03 a troy ounce, while copper for March delivery dipped 0.3% to trade at USD3.638 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,591.70 a troy ounce during U.S. morning trade, down 0.8% on the day.
Prices fell by as much as 1% earlier in the day to hit a session low of USD1,588.30 a troy ounce, the weakest level since August 3.
Gold prices were likely to find near-term support at USD1,578.55 a troy ounce, the low from July 25 and resistance at USD1,618.70, February 18’s high.
Gold’s losses accelerated after prices went into a “death cross”, triggering fresh sell orders amid bearish chart signals. A “death cross” occurs when the 50-day moving average price falls below the 200-day moving average.
From a technical standpoint, gold could see further losses, with market analysts warning of a possible move towards the USD1,550-level.
Gold prices showed little reaction to the release of U.S. data on housing starts, building permits and producer prices.
The U.S. Commerce Department said that housing starts fell by 8.5% in January to a seasonally adjusted 0.890 million, compared to expectations for a decline of 3.6% to 0.925 million.
The report also showed that the number of building permits issued in January rose 1.8% to a seasonally adjusted 0.925 million, above expectations for a 1.2% increase to 0.915 million units.
A separate report showed that producer price inflation in the U.S. rose 0.2% in January, rising for the first time in four months.
Gold traders now looked ahead to the release of the minutes of the Federal Reserve’s January meeting later in the session for hints regarding the central bank’s attitude towards monetary policy.
Any policy pause signal from the Fed minutes may send the U.S. dollar higher, pressuring dollar-denominated commodities, including gold.
Elsewhere on the Comex, silver for March delivery fell 1.3% to trade at a six-month low of USD29.03 a troy ounce, while copper for March delivery dipped 0.3% to trade at USD3.638 a pound.