The price of gold was extending losses Wednesday morning as the US dollar continued to trade firm versus a basket of currencies.
Further, the Indian central bank this week banned gold imports through consignment and said that the measure was aimed to curb unnecessary speculative or transitory gold demand to a very large extent.
Gold for June delivery, the most actively traded contract, lost $14.30 to $1,410.20 an ounce. Yesterday, gold settled lower near a three-week low as investors leaned toward riskier assets tracking rising global equity markets. With no major macroeconomic reports out of the U.S., the precious metal was also impacted by the dollar continuing to strengthen against a basket of some major currencies, amid a recent batch of upbeat data.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,051.65 tons.
Meanwhile, the U.S. dollar moved up near its 6-week high versus the euro and hovering near its 3-week high against sterling. The buck was extending its 4-year high versus the yen, while trading around its 10-month high against the Swiss franc.
In economic news, the euro zone economy contracted more than expected by economists in the first quarter of 2013, preliminary data from Eurostat showed. The gross domestic product fell 0.2 percent quarter-on-quarter in the first quarter, faster than the expected 0.1 percent contraction. This followed a 0.6 percent decline in the fourth quarter of 2012.
Meanwhile, German economy narrowly escaped recession in the first quarter of 2013, but the growth was weaker than forecast. Germany's gross domestic product grew 0.1 percent quarter-on-quarter in the first quarter, after adjustment for price, seasonal and calendar variations. This was weaker than the 0.3 percent growth forecast by economists.
Elsewhere, the Bank of England lifted its estimate for economic growth and forecast inflation to return to its 2 percent target earlier than projected. The BoE forecast economic growth to accelerate to 0.5 percent in the second quarter from 0.3 percent in first quarter of 2013.
Elsewhere, the prices of silver and platinum were moving lower morning deals.
From the U.S., the Labor Department will release its producer price inflation report for April at 8:30 am ET. Economists expect producer prices to have declined by 0.7 percent from the previous month, while core producer price inflation is expected at 0.2 percent.
Simultaneously, the New York Federal Reserve will release the results of its manufacturing survey for May. The consensus expectations call for an increase in the general business conditions index for May to 3.75 from 3.05 in April.
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