Gold prices edged up from the previous session’s four-month low as a dollar rally relented and equities softened on Wednesday.
Spot gold was up 0.1 percent at $1,273.22 an ounce by 1146 GMT after hitting its lowest since the end of last year at $1,265.90 in the previous session.
U.S. gold futures also gained 0.1 percent, rising to $1,275 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,” said ABN AMRO analyst Georgette Boele.
“The crucial level for gold prices comes 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,” said Commerzbank analyst Carsten Fritsch.
“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, with U.S. data showing 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 United States is expected to beat analysts’ estimates of 2.1 percent growth, with the Atlanta Federal Reserve’s GDPNow model projecting between 2.2 percent and 3.4 percent.
Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.3 percent on Tuesday to 749.63 tonnes, the lowest since Oct. 23. SPDR Gold holdings have dipped about 5 percent this year, reflecting bearish investor sentiment.
Spot gold could hover above support at $1,264 an ounce or bounce towards resistance at $1,284, said Reuters technical analyst Wang Tao.
In other metals, silver was up 0.3 percent at $14.85 an ounce after touching its lowest level since Dec. 26 at $14.71 in the previous session. Platinum was up 0.8 percent at $891.50 while palladium was steady at $1,390.75.
