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Gold futures hover near 6-month low in holiday-thinned trade

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Investing.com - Gold futures were little changed near a six-month low during U.S. morning hours on Monday, as a weak technical picture continued to weigh on the precious metal after prices broke below key support levels last week.

Trade volumes were expected to remain light on Monday, with Comex floor trading remaining closed for the President's Day holiday.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,611.10 a troy ounce during U.S. morning trade, up 0.1% on the day.

Prices held in a tight trading range between USD1,618.70 a troy ounce, the daily high and a session low of USD1,608.90 a troy ounce. Gold futures fell to USD1,598.25 a troy ounce on Friday, the weakest level since August 15.

Gold prices were likely to find support at USD1,590.25 a troy ounce, the low from August 15 and near-term resistance at USD1,635.95, Friday's high.

Gold's gains were limited as investors were hesitant to enter the market and open fresh long positions amid bearish chart signals.

Gold prices fell below the key USD1,600-level for the first time since August on Friday, as a bout of technical selling set in after futures broke through key support levels, triggering a flurry of sell orders.

From a technical standpoint, gold could see further losses, with market analysts warning of a possible move towards the USD1,550-level.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.15% to trade at 80.66, the highest level since January 4.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Gold traders looked ahead to the release of the minutes of the Federal Reserve's January meeting on Wednesday for hints regarding the central bank's attitude towards monetary policy.

Any policy pause signal from the Fed minutes may send the U.S. dollar higher, pressuring dollar-denominated commodities.

Prices were modestly higher earlier in the day as investors in China returned from the week-long Lunar New Year holiday to take advantage of cheap valuations.

China is the world's second-largest consumer of the precious metal, behind India.

Elsewhere on the Comex, silver for March delivery added 0.35% to trade at USD29.94 a troy ounce, while copper for March delivery dropped 1.25% to trade at a three-week low of USD3.690 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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