Gold prices steadied on Thursday after falling to a two-month low in the previous session, with investors weighing the outlook for US interest rates while technical indicators pointed to further downside.
Spot gold was little changed at US$4,116.67 an ounce by 6.25am GMT, after touching its lowest level since Aug 5 on Wednesday as a firmer US dollar and higher US Treasury yields pressured bullion.
US gold futures were also flat at US$4,140.70.
RHB Research said COMEX gold had breached its immediate US$4,150 support and closed at US$4,140.70, maintaining its negative trading bias.
The research house said the metal could extend its correction towards the US$4,000 threshold, with a break below that level likely to further weigh on market sentiment.
RHB advised traders to retain short positions initiated at US$4,284.80, or the close on Sept 23, with a stop-loss at US$4,400.
The research house revised its first support level to US$4,000, followed by US$3,800, while resistance is seen at US$4,300 and US$4,400.
RHB said the latest price action, together with a falling relative strength index, indicated that bearish momentum was strengthening. The 20-day and 50-day simple moving averages also remain above the current price, acting as resistance.
Meanwhile, markets continued to assess the Federal Reserve’s rate path. Traders see a 19 per cent chance of a rate hike later this month and an 86 per cent likelihood of an increase in December, according to CME’s FedWatch tool.
Higher interest rates typically weigh on gold because the metal does not pay interest.
Among other precious metals, spot silver fell 1.9 per cent to US$59.01 an ounce, while platinum gained 1.6 per cent to US$1,657.18 and palladium rose 1.1 per cent to US$1,136.80.
