Prices of gold slumped in European early hours on Friday as the United States dollar rebounded after indicating sharp losses fueled by the minutes from Federal Reserve’s most recent policy meeting.
On the COMEX division of the New York Mercantile Exchange, futures of gold for June delivery dipped 0.32 percent at $1,233.70. The June contract closed Thursday’s session jumping 1.12 percent at $1,237.50 per ounce.
Gold’s futures were likely to seek support at $1,217.60, which is Wednesday’s low and resistance at $1,245, which is March 30’s highest level.
The greenback declined broadly after the minutes from the Federal Reserve’s March policy meeting last on Wednesday showed that the central bank is uncertain to hike interest rates before June because of worries over global economic health.
Fed’s minutes also indicated that some policy makers believe that headwinds to growth will probably continue and that plenty urged warning over hiking rates.
Markets apparently brushed aside a report by the United States Department of Labor on Thursday showing that the number of individuals filing for initial unemployment claims in the week ended April 2 slumped by 9,000 from the previous week’s total of 276,000 to 267,000.
Prices of the precious metal gained nearly 14 percent so far this year as anticipations subsided that the Federal Reserve would move to normalize interest rates because of fears over a sluggish economy, particularly led by China.
A higher United States dollar usually weighs on gold, as it reduces the yellow metal’s appeal as an alternative asset or safe haven and makes dollar denominated commodities more expensive for foreign currency holders.