Gold slipped for a second straight session despite the drop in equities, as the dollar rose ahead of the ECB’s monetary policy meeting and as the metal continued to face resistance at 13-month highs.
The precious metal hit a low of $1251.49 an ounce, resuming its drop from a 13-month high of $1277.94 hit on Tuesday, while currently trading around $1257.33.
Asian shares dropped to a one-week low on Wednesday on worries regarding global growth and after the drop in oil on Tuesday.
However, the metal failed to take advantage of the halt in the equities’ rally, as it hit resistance at its highest level in 13 months. Yet, the metal still finds strong support at $1250.
The U.S. dollar rose for a second consecutive session against a basket of major currencies to hover around 97.35, according to the dollar index, where the advance in the dollar lowered demand on the yellow metal as an alternative investment.
The dollar benefited from the retreat in the euro on expectations the ECB will boost its stimulus and may slash the deposit rate further into negative zones at its policy meeting on Thursday.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund slipped to 25.4 million ounces on Tuesday, but remained near its highest level in 18 months.
Gold recorded its best start to a year since 1974 amid expectations the Federal Reserve would not raise its interest rates in the near term.
