Forexpros – Gold traded slightly lower on Wednesday after ECB announced its bank rescue package and the U.S. dollar gained strength.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1615.55 a troy ounce during mid U.S. trade giving back 0.15%.
It earlier hit a high of USD1643.65.
Gold futures were likely to find support at USD1612.71 and technical resistance exists at USD1618.21.
Gold spiked higher on the news of the ECB loan package to euro zone banks. However, the package failed to keep the rally going as concerns emerged that it will not be enough to stem the crisis.
Trading was light in pre Christmas holiday action, while year end selling by funds and large speculators added to the bearish sentiment.
Gold is off its highs by 15% yet the precious metal remains slated to post 13% annual gains thus booking its 11th straight annual advance.
For much of the last year, investor’s typical reaction to bad news from Europe was to buy gold, as its boosts safe haven appeal of the precious metal, but that relationship has unraveled recently.
Instead, gold futures have moved largely in line with other commodities and risk assets over the past month, with investors preferring the relative safety of the U.S. dollar.
Elsewhere on the Comex, silver for March delivery gave back 0.96% to trade at USD29.25 a troy ounce, while copper for March delivery advanced by 0.53% to trade at USD3.38 a pound.