Investing.com - Gold futures were under pressure during early U.S. morning trade on Wednesday, falling to the lowest levels of the session after data showed U.S. core durable goods orders increased for the first time in three months in May, while total orders rose more-than-expected.
Investors remained cautious ahead of a highly anticipated European summit in Brussels amid growing skepticism over the meeting’s outcome.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,565.85 a troy ounce during U.S. morning trade, slumping 0.55%.
It earlier fell by as much as 0.7% to trade at a session low of USD1,563.25 a troy ounce, which was the lowest since June 22, when prices hit a three-week low of USD1,559.15.
Gold futures were likely to find short-term support at USD1,546.35 a troy ounce, the low from June 1 and resistance at USD1,605.25, the high from June 21.
Gold futures fell to the lowest levels of the day after official data showed that U.S. core durable goods orders, which exclude transportation items, rose 0.4% in May, below expectations for a 0.9% rise.
Durable goods orders jumped 1.1% in May, exceeding expectations for a 0.5% increase.
Gold investors will be closely watching U.S. data in the second quarter for clues as to the likelihood of a fresh round of monetary easing, which could potentially hurt the dollar and support gold.
Meanwhile, investors remained cautious ahead of a European Union summit due to begin on Thursday.
Hopes that European leaders would make headway on dealing with the debt crisis in the euro area faded after German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds on Tuesday.
Investors were looking ahead to the outcome of talks between Chancellor Merkel and French President François Hollande later in the day, ahead of the EU summit meeting on Thursday and Friday.
Earlier in the day, Italy saw borrowing costs climb to the highest level since December at an auction of six-month government bonds, as investor sentiment towards Italy continued to deteriorate.
Italy’s Treasury sold the full targeted amount of EUR9 billion of six-month government bonds at an average yield of 2.95%, up from 2.10% at a similar auction last month.
Elsewhere, the yield on Spanish 10-year bonds was at 6.87%, hovering close to the critical 7% threshold that prompted Greece, Ireland and Portugal to seek international bailouts.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.3% to trade at 82.79.
Gold has lost some of its safe haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for September delivery dropped 1.1% to trade at USD26.81 a troy ounce, while copper for September delivery eased up 0.05% to trade at USD3.322 a pound.
Investors remained cautious ahead of a highly anticipated European summit in Brussels amid growing skepticism over the meeting’s outcome.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,565.85 a troy ounce during U.S. morning trade, slumping 0.55%.
It earlier fell by as much as 0.7% to trade at a session low of USD1,563.25 a troy ounce, which was the lowest since June 22, when prices hit a three-week low of USD1,559.15.
Gold futures were likely to find short-term support at USD1,546.35 a troy ounce, the low from June 1 and resistance at USD1,605.25, the high from June 21.
Gold futures fell to the lowest levels of the day after official data showed that U.S. core durable goods orders, which exclude transportation items, rose 0.4% in May, below expectations for a 0.9% rise.
Durable goods orders jumped 1.1% in May, exceeding expectations for a 0.5% increase.
Gold investors will be closely watching U.S. data in the second quarter for clues as to the likelihood of a fresh round of monetary easing, which could potentially hurt the dollar and support gold.
Meanwhile, investors remained cautious ahead of a European Union summit due to begin on Thursday.
Hopes that European leaders would make headway on dealing with the debt crisis in the euro area faded after German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds on Tuesday.
Investors were looking ahead to the outcome of talks between Chancellor Merkel and French President François Hollande later in the day, ahead of the EU summit meeting on Thursday and Friday.
Earlier in the day, Italy saw borrowing costs climb to the highest level since December at an auction of six-month government bonds, as investor sentiment towards Italy continued to deteriorate.
Italy’s Treasury sold the full targeted amount of EUR9 billion of six-month government bonds at an average yield of 2.95%, up from 2.10% at a similar auction last month.
Elsewhere, the yield on Spanish 10-year bonds was at 6.87%, hovering close to the critical 7% threshold that prompted Greece, Ireland and Portugal to seek international bailouts.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.3% to trade at 82.79.
Gold has lost some of its safe haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for September delivery dropped 1.1% to trade at USD26.81 a troy ounce, while copper for September delivery eased up 0.05% to trade at USD3.322 a pound.