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Gold futures tumble 1% on technical selling

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Shutterstock photo - Gold futures tumbled to a three-week low during U.S. morning trade on Tuesday, as a bout of technical selling set in after prices broke below a key support level.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,585.05 a troy ounce during U.S. morning trade, down 1% on the day.

Prices fell by as much as 1.1% earlier in the day to hit a session low of USD1,583.55 a troy ounce, the weakest level since March 14.

Gold prices were likely to find near-term support at USD1,575.80 a troy ounce, the low from March 14 and resistance at USD1,615.00, the high from March 22.

Gold's losses accelerated after prices broke firmly below their 21-day moving average close to the USD1,590-level, triggering fresh sell orders amid bearish chart signals.

Gold prices also struggled due to a slightly stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.1% to trade at 82.97, erasing an earlier loss of as much as 0.3%.

The greenback was higher after a string of weak data fuelled doubts over the strength of the euro zone's economy, while concerns over the potential implications of a bailout for Cyprus also weighed.

Market players now looked ahead to Friday's highly-anticipated U.S. monthly jobs report to further asses the strength of the country's economy.

The Institute of Supply Management said on Monday that its U.S. manufacturing purchasing managers' index declined to 51.3 in March, its lowest level since December, from 54.2 in February.

Any improvement in the U.S. economy could scale back expectations for further easing by the Federal Reserve, boosting the U.S. dollar and weighing on dollar-denominated commodities.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

Elsewhere on the Comex, silver for May delivery lost 0.9% to trade at an eight-month low of USD27.68 a troy ounce, while copper for May delivery shed 0.25% to trade at an eight-month low of USD3.366 a pound. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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