Forexpros – Gold futures traded lower Monday, breaking the critical technical support level of USD1,700-an-ounce level as investors unwound long positions amid diminished expectations for further stimulus measures for the U.S. economy ahead of the start of the Federal Reserve’s policy-setting meeting later in the session.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,699.45 a troy ounce during U.S. afternoon trade, giving back 0.70%.
It earlier fell by as much as 1.1% to trade at a session low of USD1,692.95 a troy ounce. Gold prices rose to a one-week high of USD1,717.25 on Friday.
Gold futures were likely to find support at USD1,677.55 a troy ounce, the low from March 9 and short-term technical resistance at USD1,717.25, last Friday’s high.
Gold prices retreated as investors locked in gains from a three-day rally and as investors readjusted positions ahead of the outcome of Tuesday’s Fed meeting, which could weigh on the precious metal.
This week’s meeting of Fed officials starts after Friday’s strong U.S. employment data, showing that the U.S. economy added 227,000 jobs in February, beating expectations for a 210,000 gain.
The economically solid data diminished expectations for a fresh round of easing by the Federal Reserve to help stimulate economic growth.
However, the Wall Street Journal reported last week that the Fed is considering a strategy that would allow it to undertake another round of bond buying, while lowering the risk of inflation.
Credit Suisse said in a report over the weekend that it does not expect new policy or communications initiatives to arise from the March 13 meeting, saying the meeting was likely to be a more routine affair than the policymakers’ last meeting in January.
Meanwhile, markets continued to mull Friday’s ruling that a credit event had been triggered by Greece’s debt swap with its private creditors.
The International Swaps and Derivatives Association stated Friday that Greece’s debt swap with private creditors constituted a “credit event”, which would activate credit-default swaps, designed to protect investors against losses.
Concerns over the euro zone’s debt crisis were expected to expand, amid renewed concerns over the fiscal health of Spain and Portugal and worries over downbeat growth prospects in the region.
Later in the day, euro zone finance ministers were to hold talks in Brussels, to give their final approval to a EUR130 billion bailout for Greece.
The leaders were also likely to discuss Spain, after Prime Minister Mariano Rajoy announced earlier this month that the country would cut its public deficit to 5.8% of annual output, instead of the planned 4.4% this year.
Elsewhere on the Comex, silver for May delivery plunged 1.91% to trade at USD33.56 a troy ounce, while copper for May delivery gave back 0.52% to trade at USD3.84 a pound.
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