Investing.com - Gold prices hovered between small gains and losses during Asian trading hours on Wednesday after rising to a 16-week high overnight as a widely-watched gauge of U.S. consumer confidence missed expectations and sparked speculation that the Federal Reserve will go even slower dismantling monetary stimulus tools than once anticipated.
Stimulus tools such as the Fed's $65 billion in monthly bond purchases tend to weaken the dollar by driving down interest rates, which bolsters gold's appeal as a hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at $1,340.80 a troy ounce during Asian trading, up 0.01%.
On Tuesday the April contract were up from a session low of $1,340.00 and off a high of $1,341.70 to settle at $1,338.00.
Futures were likely to find support at $1,319.10 a troy ounce, Monday's low, and resistance at $1,361.70, the high from Oct. 28.
The dollar, which trades inversely with gold, softened after the Conference Board reported that its consumer confidence index slipped to 78.1 in February from 79.4 in January, mainly due to concerns over general business conditions, jobs and earnings.
Analysts were expecting the index to tick up to 80.0.
The present situation index rose to its highest level in almost six years, but the expectations index declined, indicating that while consumers believe the economy has improved they do not foresee further considerable improvement in the coming months.
Also on Tuesday, the Standard & Poor’s/Case-Shiller house price index rose 13.4% in December from a year earlier, the best December reading in eight years and slightly ahead of forecasts for a 13.3% gain.
Meanwhile, silver for May delivery was down 0.01% and trading at US$21.895 a troy ounce, while copper futures for May delivery were down 0.11% at US$3.217 a pound.