Gold prices dropped to its lowest since end-December on Thursday as indications that the global economy might not be as pain-stricken as previously feared prompted investors to take risks ahead of a slew of economic data.
Spot gold fell 0.1 percent to $1,271.97 per ounce by 0345 GMT, having fallen to $1,270.99 earlier in the session, its lowest since Dec. 27.
The metal has so far lost about 1.4 percent in the holiday-shortened week, and is on track for a fourth straight weekly decline. Most markets are closed for Good Friday on April 19.
U.S. gold futures lost 0.2 percent to $1,274.50 an ounce.
The global economic concerns are off the table, said Brian Lan, managing director at dealer GoldSilver Central in Singapore, adding that bullion was pressured as it broke below the support level of $1,275 an ounce earlier this week.
“Now we will see gold testing the support at $1,265.”
Among a string of positive economic indications were data from both United States and China that tempered concerns about global growth and took the sheen off safe-haven bullion.
China’s economy grew at a steady pace in the first quarter, defying expectations of further weakness, while analysts expect Beijing to bolster its stimulus programs and further aid the economy.
In the U.S., trade deficit fell to an eight-month low in February as imports from China plunged, boosting the country’s economic growth in the first quarter.
The two counties have set a tentative timeline for the next round of trade talks and aim to conclude negotiations by early June, according to a Wall Street Journal report on Wednesday.
“Gold prices continue to sag on better economic data broadly while trade optimism appears poised to finally deliver a deal by early June at the latest,” OANDA senior market analyst Edward Moya said in a note.
“The yellow metal is also weaker from momentum on China’s surprising better-than-expected GDP, retails sales and industrial production data.”
Asian shares remain close to a nine-month peak. Focus has now turned to the release of Purchasing Managers’ Indexes (PMIs) for the manufacturing and service sectors in Europe later in the day to provide more cues on the strength of the euro zone economy.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were at 752.86 tonnes on Wednesday, still around their lowest levels since Oct. 27.
Elsewhere, silver shed 0.6 percent to $14.90 an ounce.
Spot platinum was steady at $882.95 per ounce, while palladium slipped 0.5 percent to $1,394.90 an ounce, having gained 3.9 percent to a two-week high at $1,406.81 in the previous session.
Source: Reuters
