Gold Slips Back from Key 1,900 Level ahead of U.S. Data

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Gold prices hovered under the key level of 1,900 on Thursday, as investors waited economic data that could offer clues as to whether the commoditys strength will continue.

Gold futures for June delivery fell around 5 to 1,896 an ounce, while August gold, now the most active contract, dropped roughly 5 to 1,899 an ounce. On Wednesday, gold prices settled atop 1,900 an ounce and turned positive for the year, a day after hitting a high near that resistance level.

Wednesdays move marked the highest settlement since Jan. 7, according to FactSet data.

Golds rise this week had been helped by a weak U.S. dollar steadied and slipping yield on the 10year Treasury note. Falling yields can benefit precious metals and other commodities, which dont offer a coupon, by reducing the opportunity cost of holding those assets against yieldbearing ones. A weaker dollar can make assets priced in that currency more attractive to overseas investors.

The push through the 1,900 level inspired some hopes that gold could be entering a new bullish phase.

The 1,900 mark clearly still holds great allure, but the commodity faces a tough couple of days, said Carsten Fritsch, analyst at Commerzbank in a note to clients.

A whole host of U.S. economic data are due to be published today and tomorrow. They have the potential to push the dollar and yields up or down, and by extension gold, said Fritsch. Included in that heavy batch of data is durable goods orders and initial jobless claims, plus the…

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