Gold prices hit fresh three-week low
Gold prices fell to a fresh three-week low Tuesday in early US trading as the Federal Reserve readies to begin a two-day policy meeting in which its policymaking committee is largely expected to hold interest rates steady.
Spot gold hit $1,251.88 an ounce in early trading, the lowest since April 10, while June Comex gold was last down $0.90 an ounce at $1,254.60.
It's been a rough set of trading sessions for the yellow metal, with gold ending last week at $1,268, a full $21 lower than the previous week – partially pressured by a stronger US dollar and a tax plan by Donald Trump that included a 15% corporate tax reduction.
But the most telling sign of a gold retrenchment is the activity in ETFs, which have registered record outflows.
“Gold bulls have succumbed to selling pressure by losing the battle to defend the $1,260 support. While the metal could still be supported by risk aversion in the medium to longer term, the break below $1,260 may entice sellers to send prices toward $1,240,” Lukman Otunuga, research analyst at FXTM Research, told MarketWatch Tuesday.
Analysts believe gold seems poised for a fresh bearish break down below the key 200-day moving average indicator, as investors will closely watch for clues on the pace of future interest-rate hikes and for the central bank’s outlook on the US economy in the upcoming Fed's two-day monetary-policy meeting that kicks off Wednesday.