The price of gold was extending losses Wednesday morning as the yellow metal was losing its safe haven appeal amid hopes of economic recovery in the U.S. and on easing concerns over Cyprus.
Meanwhile, Credit Suisse Wednesday cut its average price forecast for gold this year by 9.2 percent to $1,580 an ounce and its 2014 average price forecast by 12.8 percent to $1,500 an ounce and said Asian physical demand for the metal will not compensate for a lack of investment interest in other regions.
Gold for June delivery, the most actively traded contract shed $6.00 to $1,569.90 an ounce. Yesterday, gold lost over 1 percent to settle near a monthly low tracking raising equity markets as the dollar strengthened against a basket of major currencies on some upbeat U.S. factory data and some disappointing manufacturing data out of Europe. New orders for U.S. manufactured goods showed a notable rebound in February, a Commerce Department report showed Tuesday. Meanwhile, unemployment in the euro area held steady at a record high in February.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 1,208.92 tons from 1,221.26 tons.
Meanwhile, the U.S. dollar was hovering around its four-month high versus the euro and lingering near its two-week low against sterling. The buck slipped back near a fresh one-month low versus the yen and trading flat against the Swiss franc.
In economic news, inflation in the euro area decelerated for the third consecutive month in March, but to a lesser extend than forecast by economists, as energy prices increased at a significantly slower pace, initial estimates showed. The harmonized index of consumer prices increased 1.7 percent year-on-year in March after growing 1.8 percent in February. Economists had forecast a quicker slowdown to 1.6 percent. The rate of growth weakened for the third month in a row.
Elsewhere, the prices of silver and platinum were moving lower in morning deals.
In economic news from the U.S., the ADP is scheduled to release the results of its private payrolls report for March at 8:15 am ET. Economists expect the report to show an addition of 205,000 jobs by the private sector following payroll gains of 198,000 in February.
The Institute for Supply Management is due to release the results of its non-manufacturing survey for March at 10 a.m. ET. The consensus expectations call for an unchanged reading of 56 for the month.
by RTT Staff Writer
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