New York - Gold slipped from one-month highs on Wednesday after failing to break technical resistance at its 200-day moving average for a third time, but appetite for safe-haven assets ahead of a meeting of US and Chinese leaders limited its losses.
Spot gold was down 0.2 percent at $1 252.70 (R17 157.50) an ounce at 10.50am in New York yesterday, while US gold futures were 0.3 percent lower at $1 254.90 an ounce.
Gold touched $1 261.15, its highest since February 27, on Tuesday, but failed to close above its 200-day moving average, currently at $1 258, for the third time in less than six weeks.
"Investors are poised to push gold higher, said Georgette Boele at ABN Amro.
“Upward momentum is getting stronger. It looks like the market is not willing to give up yet.”
Gold has risen 8.8 percent so far this year and has held just under its 200-day moving average since late March.
Investors are hesitating to make sure there are no negative surprises for gold in US employment data due tomorrow and the minutes from the most recent US Federal Reserve meeting.
Hawkish signals from the Fed would undermine gold prices, because higher interest rates lead to higher bond yields and damp demand for non-yielding bullion.
Sharp falls in unemployment would bolster the case for rate rises and likely boost the dollar, making gold costlier for holders of other currencies.
The dollar was flat yesterday, while US bond yields were slightly higher.
Gold was also underpinned by demand for safe assets after North Korea fired a ballistic missile into the sea ahead of a summit between US President Donald Trump and Chinese President Xi Jinping today and tomorrow.
However, if gold does break above resistance it would likely stall at around $1 275 due to expectations of US rate hikes later this year and a strong dollar, said ABN Amro’s Boele.
“You will see some upward momentum, but not runaway action,” she said.
In other precious metals, spot silver was down 0.4 percent at $18.21 an ounce, having touched a one-month high of $18.41 in the previous session.
Platinum advanced 0.4 percent to $962.21 an ounce, while palladium was up 0.5percent at $808.80.