Gold jewellery. Picture: AFP PHOTO/NOAH SEELAM
Gold jewellery. Picture: AFP PHOTO/NOAH SEELAM

Bengaluru — Gold prices fell on Wednesday to hover around a four-month low touched in the previous session, as share markets rose and the dollar gained after strong US housing data dampened concerns about an economic slowdown in the country.

Spot gold was down 0.3% at $1,268.84/oz by 3.28am GMT, having hit its lowest since the end of 2018 at $1,265.90 in the last session.

US gold futures were 0.2% lower at $1,270.70/oz.

“The major factor that is pressuring gold prices is the strength of the dollar, which is also pressuring physical demand,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

The dollar index hovered near a 22-month peak after data showed that sales of new single-family homes in the US rose to a near one-and-a-half-year high in March.

The data eased concerns about a slowdown in the world’s largest economy, right ahead of the release of US GDP figures on Friday.

The US is expected to beat analyst estimates of a 2.1% rate of growth with the Atlanta Federal Reserve’s GDPNow model projecting growth anywhere between 2.2% and 3.4%.

Such an event would lift global economic sentiment and support the dollar, analysts said.

Gold prices were also pressured as Asian shares tracked overnight gains on Wall Street, where both the Nasdaq and S&P 500 indexes marked record closing highs.

Gold dropped to its lowest in 2019 in the last session, nearly 6% away from its February peak of $1,346.73.oz.

“Gold’s key support at $1,280 was taken out some time ago, while compounding the negativity further is the fact that both the 50-day and 100-day moving averages have turned south as well,” INTL FCStone analyst Edward Meir wrote in a note.

“We continue to see a slow grind in gold for the moment, as there is very little that can make the case for a short-term upside swing. About the only thing we see is that the complex is somewhat oversold … but even that is not in extreme territory.”

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, on Tuesday fell to 749.63 tonnes, the lowest since October 23.

In other metals, silver dropped 0.4% to $14.75/oz, after declining to its lowest level since December 26 at $14.71 in the previous session.

Platinum was up 0.3% at $886.87/oz, while palladium was 0.3% lower at $1,386.01/oz.