Gold fell on Wednesday, holding near the 2019 lows touched in the previous session, as robust economic data from China assuaged concerns about global growth and drove investors to riskier assets.
Spot gold was down 0.1 percent to $1,274.73 per ounce at 10:27 a.m. EDT (1427) GMT, having fallen as much as 1.2 percent to $1,272.70, its lowest since Dec. 27, on Tuesday
U.S. gold futures were flat at $$1,277.10 an ounce.
“The pretty good Chinese data implies the concerns of a slowdown in global growth have been mitigated to a great extent, which should elevate risk appetite, in turn pressuring gold,” said Bart Melek, head of commodity strategies at TD Securities in Toronto.
China’s economic growth in the first quarter remained steady at 6.4 percent, beating expectations for 6.3 percent expansion.
The data pushed Wall Street’s main equity markets close to all-time highs on Wednesday, boosting appeal for riskier assets and powering global stocks.
However, a slightly weaker dollar gave some support for bullion, analysts said, making the metal cheaper for holders of other currencies.
Gold prices have fallen more than 5 percent since scaling a 10-month peak in February.
On the technical front, gold’s break below the psychologically significant $1,300 mark and other key support levels, including the 100- and 50-day moving averages, signalled a further downside to prices, analysts and traders said.
Further weakness in gold is possible in the near term, potentially testing the $1,259 level, which is likely to hold, Commerzbank analysts wrote in a note.
Indicative of current sentiment, holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell to a near six-month low of 752.27 tonnes on Tuesday. Holdings have fallen 4.5 percent so far this year.
On the flip side, gold prices were likely to climb to $1,400, while silver could rise to $17 by end-2019 since overall weak economic growth globally could take a toll on both equity prices and risk appetite, analysts at Capital Economics said in a note.
Gold is considered a safe store of value during times of economic or political uncertainty.
“That said, we expect risk appetite to gradually return as the U.S. economy picks up.”
Silver gained 0.1 percent to $14.99 an ounce.
Meanwhile, spot platinum rose 1.1 percent to $885.95 per ounce, while palladium climbed 2.1 percent to $1,378.40.
