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Gold futures edged lower in choppy trade Thursday as investors awaited a catalyst to break the precious metal out of its trading range.
The gold price is “struggling to find any direction as the dollar index continues to inch higher,” said Naaem Aslam, chief market analyst at AvaTrade. In Thursday dealings, the ICE U.S. Dollar Index
DXY,
was up 0.3%.
U.S. Treasury Secretary Janet Yellen said in her testimony to Congress Wednesday that the U.S. economic conditions are improving, and U.S. banks hold healthy balance sheets to the extent that they can resume their dividend, he said in a market update. “Of course, from the traders’ perspective, that is another risk-on event, and it is likely to fade gold demand further.”
However, “as long as the gold price continues to trade above the $1,700 level, the gold price is likely to stay out of trouble,” said Aslam.
Gold for April delivery
GC00,
GCJ21,
fell $3.20, or 0.2%, to $1,730 an ounce. May silver
SIK21,
fell 25 cents, or 1%, to $24.98 an ounce.
Gold remained lower after data showed U.S. first-time claims for unemployment benefits last week fell to 684,000 from 781,000. Separately, fourth-quarter gross domestic product data were revised to show the economy expanded at a 4.3% annualized rate versus a previous estimate of 4.1%.
Earlier, Federal Reserve Chairman Jerome Powell, in an interview with National Public Radio, said the central bank would provide investors with advance notice of plans to pull back its emergency support to the economy.
Gold has been stuck in a lateral trading range around $1,730 an ounce as traders look for a clear signal on direction, said Carlo Alberto De Casa, chief analyst at ActivTrades, in a note.
“Bullish theories are supported by the huge liquidity injected into the system by central banks in the last few months, while uncertainty remains just around the corner with any significant correction of stocks likely to trigger a fresh rally for bullion,” he said. “On the flip side, ‘inflation’ and ‘tapering’ are the two main words worrying the gold market.”
On Comex, other metals traded broadly lower, led by a 2.7% decline in May copper
HGK21,
to $3.95 a pound.
April platinum
PLJ21,
lost 2.2% to $1,154.20 an ounce and June palladium
PAM21,
declined by 1.4% to $2,603.50 an ounce.
