FX.co ★ Gold slips into red but not for long

This morning, the precious metals market is showing a slight decline which is likely to be a correction rather than a downtrend. Over the past four sessions, gold has moved notably higher and has settled firmly at these levels. The weakness in the US dollar was the main reason to prop up gold prices. The greenback is under pressure as markets fear that the inflationary risks will increase as soon as the extended stimulus package is approved in the US. Thus, the economic data that has been revealed in the media caused serious concerns among investors.

In the early session, gold futures for April on the New York Stock Exchange fell by 0.29%, or $5.35. As a result, the price edged lower to $1,837.35 per troy ounce. The level of support for gold was found at $1,792.2 per troy ounce, while the resistance moved to the area of $1,856.6.

Silver futures contracts for March also moved lower today. In the morning trade, the price declined by 0.79% and reached the level of $26.865 per troy ounce.

March copper futures were down 0.36% to trade at $3.7597 per pound.

Notably, gold has been posting gains for four sessions in a row and managed to add 2.9%. The main bullish factor for gold was the easing of the US currency. The US dollar was losing ground which made gold more affordable for holders of the currency. So, investors took advantage of the situation and rushed to open new buy positions.

In addition, market participants are closely monitoring the macroeconomic data from the US. Investors hope to get some hints to determine further direction of the precious metals. The course of the development is also important, not just the additional driver itself. In particular, the Consumer Price Index in the US rose by 1.4% in January year-on-year. The same increase was recorded a month earlier. However, according to the preliminary data, analysts expected to see a rise by 1.5%, which eventually was not confirmed.

There is an opinion that gold has been losing its shine among investors as a safe haven asset. Traders no longer rush into gold to find a hedge against inflation.