London 15/03/2012 - Gold traded sideways on Thursday morning, propped up by investors looking to buy into the metal cheaply after yesterday's slump. "Gold struggled with $1,700 and on Wednesday, gold dropped even below $1,650, losing more than 1.5 percent," Credit Suisse said. The metal has now fallen around eight percent since the end of last month. Still, spot gold was last $1.45 higher at $1,644.90-1.645.20 per ounce, up from an intraday low of $1,635.80. Gold broke through multiple support levels yesterday, stopping just short of $1,630 at its lows, before bargain-hunting brought some stability back to the market.
Market observers expect the metal to consolidate above $1,634 today, although it remains under pressure from a technical perspective.
"We would expect prices to consolidate after recent losses," FastMarkets analyst William Adams said. "The charts have been damaged so there is a risk of further weakness but equally we would not be surprised if bargain-hunters start to provide support."
Market sentiment weakened after the Federal Open Market Committee (FOMC) said it expects moderate economic growth in the coming months while it maintains exceptionally low interest rates.
"This is negative for gold as interest rates are opportunity costs of holding gold. The coming days will be difficult for gold," Credit Suisse added.
In wider markets, the euro was trading at 1.3048 against a strong dollar, which is still close to one-month highs. The euro had hit an intra-high of 1.3068 earlier.
Today's economic agenda will offer plenty of food for thought - figures scheduled for release from the US include the Empire State and Philly Fed manufacturing indices, February PPI, January TIC long-term purchases and weekly unemployment claims. The ECB will also publish its monthly bulletin and employment report.
In other news, India unveils its federal budget on Friday. The emerging economy is struggling with slowing growth rates, increased governmental debts and high inflation.Among other precious metals, silver was stable at $32.25-32.29, palladium dropped $7 to $690-707 and platinum gained $2 to $1,674-1,684. For more information please visit Newbridge Alliance.