Gold flat, holds above key support
New York/London - Gold prices were little changed on Wednesday, holding above a key technical support near $1,275 an ounce, though the metal is vulnerable to further losses as investor demand remains slack, analysts said.
The bullion market found some support after Commerce Department data showed sales of new US single-family homes tumbled to their lowest level in eight months in March, dealing a setback to the housing market recovery.
Gold traded in a less than $10 range, holding above its 100-day moving average of $1,277 an ounce, after the previous session's fall to a 2-1/2-month low near that level.
“We continue to watch gold between the $1,275 and $1,280 level where key support is still apparent. If taken out, we could see rather heavy stop-loss selling set in,” said Edward Meir, metals analyst at INTL FCStone.
Spot gold was up 0.1 percent at $1,283.70 an ounce by 11:25 a.m. EDT (17:25 SA time).
US gold futures for June delivery were up $1.80 an ounce at $1,282.40.
Physical demand in Asia, which tends to provide some support at lower price levels, failed to emerge after Tuesday's drop as buyers expect more price declines, dealers said.
Demand has been quiet in top buyer China as a weaker yuan made it more expensive to buy dollar-denominated gold.
China's yuan hit a 16-month low against the dollar on Wednesday.
Investment demand also remained weak with the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, seeing sharp outflows in recent days.
Last week alone, the fund's outflows totalled 9.3 tonnes, erasing all the gains made in the year.
Among other precious metals, silver was up 0.4 percent at $19.44 an ounce, while platinum rose 0.4 percent to $1,397.25 an ounce and palladium was up 0.5 percent at $784 an ounce. - Reuters