Investing.com - Gold futures edged lower on Thursday, re-approaching a key support level as the U.S. dollar erased losses against the euro and as physical demand in India remained muted.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,644.75 a troy ounce during early European morning trade, shedding 0.34%.
It earlier fell by as much as 0.5% to trade at a two-day low of USD1,642.85 a troy ounce.
Gold futures were likely to find support at USD1,634.75 a troy ounce, the low from March 14 and short-term resistance at USD1,661.75, Wednesday’s high.
Gold prices continued to take cues from the currency market, tracking movements in the euro. Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which in the past has been a positive driver of prices.
The single currency turned lower against the U.S. dollar, following the release of data showing manufacturing activity in France in March unexpectedly contracted, dropping to a four month low.
Renewed concerns over the fiscal health of debt-laden euro zone members, Spain, Portugal and Italy also weighed on the single currency.
Italian and Spanish debt yields rose sharply on Wednesday on concerns about Spain's slow progress in boosting its finances, while Italy faced stiff opposition to its severe austerity steps, with the country's largest trade union calling a general strike over labor reforms.
Meanwhile, Portugal is braced for a 24-hour general strike against the government’s austerity measures introduced by the government in return for the country’s EUR78 billion bailout.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.1% to trade at 79.89, erasing earlier losses of as much as 0.2%.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
News that Indian jewelers have extended the first nationwide strike in seven years for two additional days further weighed on the precious metal. The strike will continue till Friday and it is still uncertain how long this impasse will continue.
The strike comes in response to a 4% hike in India’s customs duty on gold announced last week. India is the world's top gold consumer.
Meanwhile, a weak technical picture has led investors to shy away from initiating fresh long positions in the market, amid concerns over a sharper near-term correction.
Market participants noted that with prices now trading well below their long-term technical support, gold could extend losses to USD1,580 an ounce in the short term before recovering.
Gold has fallen around 8% since late February and are about 14% below the all-time high of USD1,920 per ounce hit in September.
Elsewhere on the Comex, silver for May delivery dropped 0.75% to trade at USD31.98 a troy ounce, while copper for May delivery tumbled 1.15% to trade at USD3.801 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,644.75 a troy ounce during early European morning trade, shedding 0.34%.
It earlier fell by as much as 0.5% to trade at a two-day low of USD1,642.85 a troy ounce.
Gold futures were likely to find support at USD1,634.75 a troy ounce, the low from March 14 and short-term resistance at USD1,661.75, Wednesday’s high.
Gold prices continued to take cues from the currency market, tracking movements in the euro. Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which in the past has been a positive driver of prices.
The single currency turned lower against the U.S. dollar, following the release of data showing manufacturing activity in France in March unexpectedly contracted, dropping to a four month low.
Renewed concerns over the fiscal health of debt-laden euro zone members, Spain, Portugal and Italy also weighed on the single currency.
Italian and Spanish debt yields rose sharply on Wednesday on concerns about Spain's slow progress in boosting its finances, while Italy faced stiff opposition to its severe austerity steps, with the country's largest trade union calling a general strike over labor reforms.
Meanwhile, Portugal is braced for a 24-hour general strike against the government’s austerity measures introduced by the government in return for the country’s EUR78 billion bailout.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.1% to trade at 79.89, erasing earlier losses of as much as 0.2%.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
News that Indian jewelers have extended the first nationwide strike in seven years for two additional days further weighed on the precious metal. The strike will continue till Friday and it is still uncertain how long this impasse will continue.
The strike comes in response to a 4% hike in India’s customs duty on gold announced last week. India is the world's top gold consumer.
Meanwhile, a weak technical picture has led investors to shy away from initiating fresh long positions in the market, amid concerns over a sharper near-term correction.
Market participants noted that with prices now trading well below their long-term technical support, gold could extend losses to USD1,580 an ounce in the short term before recovering.
Gold has fallen around 8% since late February and are about 14% below the all-time high of USD1,920 per ounce hit in September.
Elsewhere on the Comex, silver for May delivery dropped 0.75% to trade at USD31.98 a troy ounce, while copper for May delivery tumbled 1.15% to trade at USD3.801 a pound.