Gold prices fell for a second session on Wednesday as physical demand remained muted and as the US dollar picked up additional strength against the euro. Market participants were focused on upcoming Fed and Davos World Economic Forum statements.
An elevated mood brought about some gains in the precious and the base metals spaces this morning. Crude oil was also assisted in notching a better than 1% gain by an EU decision to ban Iranian oil imports as of July.
The week's 2% rally in the euro bumped up against resistance near the $1.298 area and the common currency retreated nearly half a percent pulling gold prices down by a similar amount as Friday's trading action got underway in New York this morning.
The IMF's quest for another $500 billion in lending resources managed to boost the euro for a second day this morning and lifted gold prices to five-week highs around the $1,670 resistance area before momentum waned.
China's slowest pace of growth in over two years prompted a rally in commodities as speculators turned bullish on the idea that the country's central bank will now take easing steps in order to get growth back above the fourth quarter's 8.9% level.
Spot precious metals dealings opened the week's final session with lower prices across the boards and then went lower still. Gold fell $18 and was quoted just above the $1,630 bid level per ounce while silver dropped 70 cents to touch $29.55 per ounce.
Gold prices opened with a gain of $11 at $1,654 the ounce in New York while silver advanced about 40 cents to the $30.35 level. Both metals are in the midst of an upward push which might carry them to the $1,700 and $32 areas respectively.
Gold prices traded with muted gains ranging from almost unchanged to roughly seven dollars and with bids coming in mainly around $1,635 to $1,645 in early action after yesterday's rally in part helped by robust Chinese gold import data.
European bank-related anxieties resurfaced as the first full week of trading commenced across the globe and kept the euro under pressure and well under the $1.28 mark while gold made another retreat to near $1,605 ahead of the opening bell in New York.
Gold prices opened on the nervous side this morning but eked out an 80-cent gain to start the final session of the week at $1,622.20 per ounce. The dollar's current strength is continuing to hold gold back from convincingly surpassing 200-DMA resistance.