Gold inches up from multi-month low as dollar, equities take pause

New York (April 24) - Gold prices inched up from the previous session's four-month low on Wednesday, as a dollar rally relented and equities softened.

Spot gold was up 0.1 percent at $1,270.60 per ounce by 0948 GMT, after hitting its lowest price since the end of last year at $1,265.90 in the last session.

U.S. gold futures were 0.1 percent lower at $1,272.40 an ounce.

"The recent weakness in gold has had more to do with a strong U.S. dollar. The dollar rally we saw on Tuesday did not continue today and that's why gold looks constructive this morning," ABN AMRO analyst Georgette Boele said.

"The crucial level for gold prices come at the 200-day moving average around $1,250. As long as that level holds, gold prices will be moving up."

Gold prices have fallen about 6 percent from a peak in February as the dollar firmed and global equities ticked up, with some of the risks of a global growth slowdown fading.

"Given the extraordinary lose monetary policy by the European Central Bank, U.S. Federal Reserve and economic uncertainties, the fall in gold prices is unjustified," Commerzbank analyst Carsten Fritsch said.

"Speculators turning net short on gold prices shows the exaggerated market pessimism. It's just a matter of time before gold starts to rally again."

The dollar index was holding steady after hitting a 22-month peak on Tuesday as U.S. data showed sales of new single-family homes rose to a near 1-1/2-year high in March.

This eased concerns about a slowdown in the world's largest economy, ahead of U.S. GDP figures on Friday. The U.S. is expected to beat analysts' estimates of a 2.1 percent rate of growth with the Atlanta Federal Reserve's GDPNow model projecting between 2.2 to 3.4 percent. Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, on Tuesday fell 0.3 percent to 749.63 tonnes, the lowest since Oct. 23. SPDR Gold holdings have dipped about 5 percent so far this year, reflecting bearish investor sentiment. Spot gold may hover above support at $1,264 per ounce or bounce towards a resistance at $1,284, Reuters technical analyst Wang Tao said. In other metals, silver was steady at $14.83 per ounce, after declining to its lowest level since Dec. 26 at $14.71 in the previous session.

Platinum was up 0.6 percent at $889.98 per ounce, while palladium was 0.2 percent lower at $1,389.71 per ounce.

Reuters