Gold hits session highs after dismal durable goods data

Investing.com - Gold erased losses to hit the highest levels of the session on Tuesday, after data showed that U.S. durable goods orders fell unexpectedly in December, fuelling concerns over the strength of the economy.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery picked up $6.50, or 0.51%, to trade at $1,286.90 a troy ounce during U.S. morning hours.

Prices fell by as much as $7.10 earlier to hit a daily low of $1,273.30, the weakest level since January 19.

A day earlier, gold lost $13.20, or 1.02%, to settle at $1,280.40 as appetite for safe-haven assets weakened after jitters over the Greek election diminished.

Futures were likely to find support at $1,272.10, the low from January 20, and resistance at $1,303.00, the high from January 23.

Also on the Comex, silver futures for March delivery tacked on 1.5 cents, or 0.08%, to trade at $17.99 a troy ounce. On Monday, silver slumped 31.7 cents, or 1.73%, to end at $17.98.

In a report, the U.S. Commerce Department said that total durable goods orders, which include transportation items, fell by 3.4% last month, compared to expectations for a gain of 0.5%.

Core durable goods orders, excluding volatile transportation items, declined by 0.8% in December, disappointing forecasts for a 0.6% gain.

Orders for core capital goods, a key barometer of private-sector business investment, fell by 0.6% last month, worse than expectations for a 0.9%.

Shipments of core capital goods, a category used to calculate quarterly economic growth, declined 0.2% in December, disappointing forecasts for a 1.0% gain.

Market players now looked ahead to the start of the Federal Reserve's two-day policy meeting later in the day, for further clarification on when interest rates might start to rise.

Meanwhile, the euro was higher against the dollar, after hitting an 11-year low in the previous session, as fears sparked by anti-austerity Syriza party's victory in Sunday's Greek elections subsided.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.75% to hit 94.58, after touching a more than 11-year high of 95.77 last Friday.

Elsewhere in metals trading, copper for March delivery shed 4.6 cents, or 1.82%, to trade at $2.497 a pound.

The March contract hit a low of $2.419 on Monday, a level not seen since June 2009, before turning higher to close at $2.543, up 4.1 cents, or 1.66%.

The red metal is down approximately 11.5% so far in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.