Gold prices edged up from the previous session’s four-month low as a dollar rally relented and equities softened yesterday.
Spot gold was up 0,1 percent at $1 273 an ounce by 1248 GMT after hitting its lowest since the end of last year at $1 265,90 in the previous session.
US gold futures also gained 0,1 percent, rising to $1 274,70 an ounce.
“The recent weakness in gold has had more to do with a strong US 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 US data showing sales of new single-family homes rose to a near 1-1/2-year high in March.