Investing.com - Investing.com - Gold futures fell to the lowest level since August during U.S. morning trade on Thursday, breaking below a key technical support level, after data showed that the U.S. economy grew at a faster rate than initially estimated during the third quarter of 2012.
Meanwhile, investors continued to monitor negotiations among U.S. lawmakers to avoid the looming "fiscal cliff" crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,654.55 a troy ounce during U.S. morning trade, down 0.8% on the day.
Prices fell by as much as 0.9% earlier in the day to trade at a session low of USD1,652.85 a troy ounce, the weakest level since August 31.
Gold prices were likely to find short-term support at USD1,646.45 a troy ounce, the low from August 31 and resistance at USD1,677.85, Wednesday's high.
Gold's losses accelerated after prices broke below their 200-day moving average close to the USD1,662-level. 200-day moving averages are considered key trading levels for many investors.
The U.S. Commerce Department said in a report earlier that the U.S. economy expanded at a seasonally adjusted annual rate of 3.1% in the three months to September, up from a preliminary estimate of 2.7% and above expectations for growth of 2.8%.
The stronger-than-expected growth data eased concerns over the pace of the U.S. economic recovery. Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve.
Also Thursday, the U.S. Labor Department said the number of individuals filing for initial jobless benefits in the week ending December 15 rose by 17,000 to a seasonally adjusted 361,000, compared to expectations for an increase of 13,000 to 357,000.
Meanwhile, market players continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the two weeks left before the deadline.
Doubts over whether a deal will be reached ahead of the year-end deadline intensified Wednesday after a spokesman for President Barack Obama said that the White House would veto a tax and spending proposal presented by House Speaker John Boehner.
The precious metal has been under heavy selling pressure in recent sessions, as large institutional investors and hedge funds liquidated positions to lock in gains ahead of the end of the year.
Elsewhere on the Comex, silver for March delivery plunged 2.6% to trade at USD30.30 a troy ounce, the lowest since August 23, while copper for March delivery tumbled 2% to trade at USD3.533 a pound.
Trading was expected to remain subdued over the next two weeks, with year-end positioning driving flows and as holidays in many countries limit activity. Lower-than-usual volumes could spark volatile trading, resulting in rapid changes in metal prices during the final weeks of the year.
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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.
