Gold falls to new 3-week low as safe-haven demand wanes

Gold prices fell on Tuesday to a new three-week low, bringing losses since the start of the week to more than one percent, as demand for riskier assets drove stocks higher and the dollar hit a six-week peak against the yen.

"Risk appetite is back," said Societe Generale analyst Robin Bhar.

Gold was likely to move towards its 400-day moving average of $1,224, technical analysts at ScotiaMocatta said in a note.

"The price hold below 1260$ increases the odds for new downward impulse. Breaking below the diagonal support and the continuum of the downward tendency will give us signal for possible test of 1240$ level."said Stefan D.Angelov - Head of Stocks trading - Varchev Finance Ltd.

"Short-term down movement is still on track, as we may see test of the short-term bottom at 1251$ with the next few bars."

Investors were looking ahead to the outcome of a two-day U.S. Federal Reserve policy meeting to be announced at 2 p.m. EDT (1800 GMT) on Wednesday and employment data that will indicate the speed of U.S. economic growth.

"If the Fed signals further rate increases and shrinking of the balance sheet tomorrow and then we get a good jobs number on Friday we should certainly end the week below $1,250, and maybe closer to $1,240," said Societe Generale's Bhar.

In other precious metals, silver was down 0.3 percent at $16.78 an ounce, after earlier touching $16.76, its lowest since Jan. 27.

Platinum was 0.3 percent lower at $921.55, near four-month lows.

Source: Reuters

Trader Bozhidar Arabadzhiev

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