Precious
Gold looked vulnerable after yesterday’s sharp as improvement in U.S. economic outlook and worries of slowdown in China weighed on the metal’s demand.
After the shiny metal managed to lock 1.21 percent gain, the price plunged 1.82 percent on Tuesday, hitting a 1-1/2 week low of $1,290.34
While the escalating tensions in Ukraine is supposed to provide haven demand on the metal, investors are giving more attention to the latest economic development in the world’s biggest economy to predict the Fed’s monetary prospects.
Expectations are in favor of seeing ongoing cut in the Fed’s bond purchases at the same monthly pace of $10 billion, yet the timing of raising the borrowing cost is not clear yet, especially after Fed Chairman Janet Yellen referred last week the U.S. economy will need to hold stimulus for “some time.”
Nevertheless, the most recent data is providing strong clues that recovery is gaining strength, which may prompt policymakers to raise borrowing cost earlier than anticipated.
Later in the day, the U.S. will release housing starts and industrial production reports for the March. Thereafter, Fed`s Yellen Speaks to Economic Club of New York and Fed will release Beige Book.
In China, a report released on Wednesday pointed to the slowdown in growth pace in the first three months this year to 7.4 percent, marking the weakest in six quarters.
Given the fact that China is world’s biggest bullion buyer, the downbeat growth outlook for China negatively affected demand on the metal.
On the political front, Ukrainian troops regained state buildings that were seized by armed pro-Russia activists in the eastern Donetsk region.
Meanwhile, gold is trading around $1300.91 an ounce after hitting a high of $1303.71 and a low of $1293.43.
The U.S. dollar retreated for the first time in four sessions versus a basket of major currencies to hover around 79.77, after hitting a peak of 79.92, according to the dollar index.
Crude Oil for May’s delivery resumed its rise for a third session to trade around $104.40 a barrel after touching a high of $104.44.