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Gold prices fell on Wednesday to hover around a four-month low touched in the previous session, as share markets rose and the dollar gained after strong United States (US) housing data dampened concerns about an economic slowdown in the country.
Spot gold was down 0.3 per cent at $1,268.84 per ounce by 0328 GMT, having hit its lowest since the end of last year at $1,265.90 in the last session.
US gold futures were 0.2 per cent lower at $1,270.70 an ounce.
“The major factor that is pressuring gold prices is the strength of the dollar, which is also pressuring physical demand,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
The dollar index hovered near a 22-month peak after data showed that sales of new single-family homes in the US rose to a near 1-1/2-year high in March.
The data eased concerns about a slowdown in the world's largest economy, right ahead of the release of US gross domestic product (GDP) figures on Friday.
The United States is expected to beat analyst estimates of a 2.1 per cent rate of growth with the Atlanta Federal Reserve's GDP. Now model projecting growth anywhere between 2.2 to 3.4 per cent.
Such an event would lift global economic sentiment and support the dollar, analysts said.
Gold prices were also pressured as Asian shares tracked overnight gains on Wall Street, where both the Nasdaq and S&P 500 indexes marked record closing highs.
Gold dropped to its lowest this year in the last session, nearly 6 percent away from its February peak of $1,346.73 an ounce.
“Gold's key support at $1,280 was taken out some time ago, while compounding the negativity further is the fact that both the 50-day and 100-day moving averages have turned south as well,” INTL FCStone analyst Edward Meir said in a note.
“We continue to see a slow grind in gold for the moment, as there is very little that can make the case for a short-term upside swing. About the only thing we see is that the complex is somewhat oversold. But even that is not in extreme territory,” said Meir.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, on Tuesday fell to 749.63 tonnes, the lowest since October 23.
In other metals, silver dropped 0.4 per cent to $14.75 per ounce, after declining to its lowest level since Dec. 26 at $14.71 in the previous session.
Platinum was up 0.3 per cent at $886.87 per ounce, while palladium was 0.3-per cent lower at $1,386.01 per ounce.
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