U.S. dollar traded close to a near two-year peak; Gold prices were little changed on Thursday
Gold prices were little changed on Thursday as a firm dollar nullified support from faltering equities and a slew of weak economic data from far and wide that raised flags about the pace of global economic growth.
Spot gold was steady at $1,275.51 per ounce, as of 0548 GMT. U.S. gold futures slipped 0.1 percent to $1,277.60 an ounce.
Asian shares took a hit after data showed German business morale deteriorated in April as trade tensions hurt the industrial engine of Europe’s largest economy.
South Korean economy also unexpectedly contracted in the first quarter, fuelling concerns that the global economy is still not out of the woods.
“Global growth data outside the U.S. have been actually quite poor, we haven’t had anything to sink our teeth in,” said Stephen Innes, head of trading and market strategy, SPI Asset Management.
“We have also anticipated some correction on the equity markets and that just turns the focus back to the major economic drivers,” Innes added.
Gold is often used as a hedge against economic and financial uncertainties.
However, the U.S. dollar, which traded close to a near two-year peak, kept the metal in check by making it more expensive for holders of other currencies.
Having hit a four-month low of $1,265.90 an ounce earlier this week, the outlook for gold remains bearish in the near-term, with the metal still below its 50-day and 100-day moving averages.
“Heavy technical selling activities have imposed negative pressures on the precious metal for the near term,” Benjamin Lu, analyst, Phillip Futures, said in a note.
“Market bears must break beneath $1,265 for a continuation of the negative trend scenario. A bearish breakthrough will see gold prices target the next main station of $1,245 in the coming term.”
Attesting the bearish momentum, holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, dipped 0.2 percent to 747.87 tonnes on Wednesday, its lowest since Oct. 19.
Market participants will now shift focus towards the release of the U.S. GDP data, which is due on Friday.
Investors also eyed further trade negotiations between the United States and China. The two countries are slated to begin the next round of talks on trade on April 30, in an attempt to conclude a nearly year-long tariff spat.
Elsewhere, silver fell 0.1 percent to $14.91 an ounce, while platinum climbed 0.7 percent to $884.31.
Palladium dipped 0.3 percent to $1,413.39 an ounce.