Gold Drops For A Second Day Hit By Resistance At $1695

Precious gold fell for a second day on Thursday trading, after touching one-month high this week, as it fell from tough resistance at $1695 an ounce.

Gold is currently trading around $1678.81 an ounce to continue its drop for a second day after it was hit by resistance near yesterday's high of $1694.91.

The breach of SMA 50 level on the daily charts at $1691.95, noting that gold fell from this level since the beginning of the year where the highest this year was seen at $1695.87 recorded on January 17.

Meanwhile, the yellow metal is unable to gather momentum and get direction from fundamentals as it neither tracked large gains seen in shares nor was hit like safe havens like the yen which tumbled to 2 1/2 year low against the dollar this week.

Gold's gain from the BOJ's latest monetary decision, which included the purchase of about 13 trillion yen ($145 billion) in assets per month, was limited as the bank said will begin the new program starting from January 2014, plus inflation is not a threat at the meantime for major economies.

But gold may get its direction from next week's important events as the Fed will confirm its monetary stimulus and the U.S. will release its nonfarm payrolls report.

Today, there is some optimism after House of Representatives managed to pass a vote to suspend the United States debt limit, where the vote was very important as it allows the government to borrow till May 19.

On the other hand, data from China beat estimates as HSBC flash manufacturing widened expansion to 51.9 in January from 51.5 in December.

Later in the day, the focus will be in the euro area's flash manufacturing and services for this month and Spain's fourth quarter unemployment data.

On the downside, the International Monetary Fund (IMF) slashed its growth forecasts for the global economy in 2013 to 4.1% from 4.2% predicted in October, yet it said it would be better than 2012.

In the FX market, the dollar surged against a basket of major currencies as indicated by the Dollar Index which is currently hovering around 79.96, compared with the day's opening of 79.91.

Crude oil for February's delivery inched down to $95.48 a barrel from the day's opening of $95.46.