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Gold steady near 2-week high ahead of Italy auction, U.S. retail sales

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Shutterstock photo - Gold futures were little changed in rangebound trade during European morning hours on Wednesday, holding near the previous session's two-week high as investors stuck to the sidelines ahead of an auction of Italian government bonds and the release of U.S. retail sales data later in the session.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,591.30 a troy ounce during European morning trade, nearly flat on the day.

Prices held in a tight USD3-trading range between USD1,590.50 a troy ounce, the daily low and a session high of USD1,593.00 a troy ounce. Comex gold climbed to USD1,597.40 a troy ounce on Tuesday, the strongest level since February 28.

Gold prices were likely to find support at USD1,554.80 a troy ounce, the low from February 21 and near-term resistance at USD1,602.20, the high from February 28.

Markets were awaiting the outcome of an auction of three-year and 15-year Italian government bonds later Wednesday, in an important test of investor appetite for the country's debt, as concerns over ongoing political uncertainty lingered following last month's inconclusive elections.

Spain was to hold an auction of long-dated government bonds on Thursday after Madrid saw borrowing costs fall to their lowest level since April 2010 following an auction of six and 12-month bonds on Tuesday.

Gold traders were also looked ahead to the release of U.S. retail sales data for February, as investors look for further signs the U.S. economic recovery is gaining momentum.

Last week, data showed that the U.S. economy added 236,000 jobs in February, beating expectations for a 160,000 increase, while the unemployment rate fell to a four-year low of 7.7%.

Market analysts noted that the still-high jobless rate will keep the Federal Reserve's asset-purchase program in place for the indefinite future.

The central bank previously stated that monetary policy will remain accommodative "at least as long" as the jobless rate remains above 6.5%.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank could bring quantitative easing, one of the biggest boosts to gold's bull run, to an end this year.

Gold's investment appeal has weakened in recent weeks as market players opted for global equities over the precious metal. The Dow Jones Industrial Average has climbed 10.5% in 2013 to hit a record high while gold has declined 5%.

However concerns over the global economic outlook remain after Chinese data released over the weekend showed consumer inflation accelerated sharply in February, while industrial production slowed to the lowest level since October 2009.

Fears over a possible economic impact from the U.S. sequestration spending cuts and last month's election deadlock in Italy also was likely to remain in focus.

Elsewhere on the Comex, silver for May delivery shed 0.3% to trade at USD29.09 a troy ounce, while copper for May delivery was flat to trade at USD3.553 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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