Gold traded lower on Tuesday, despite the Empire State report showing that the New York Federal Reserve’s index of manufacturing conditions improved at a weaker rate than expected in February.
On the Comex division of the New York Mercantile Exchange, gold futures
for April delivery shed $3.60, or 0.29%, to trade at $1,223.50 a troy
ounce during U.S. morning hours. Prices held in a range between
$1,218.70 and $1,233.70. Futures were likely to find support at
$1,216.50, the low from February 11, and resistance at $1,236.70, the
high from February 16.
Gold prices remained fragile amid ongoing expectations for the Federal Reserve to start raising U.S. interest rates as early as June.
The Fed Bank of New York said that its general business conditions index decreased to 7.8 this month from a reading of 10.0 in January. Analysts had expected the index to dip to 8.5 in February.
Market participants will watch Wednesday’s minutes of the latest Fed meeting for further indications on when the central bank may start to hike interest rates.
Hopes for higher borrowing rates going forward are considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Silver futures for March delivery dropped 56.1 cents, or 3.24%, to trade at $16.73 a troy ounce.
Copper for March delivery sank 3.5 cents, or 1.34%, to trade at $2.570 a pound.
Trading volume in the copper market was expected to drop in the coming days as investors in China are off from February 18 through 24 for the Lunar New Year holiday.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
