Gold prices edged lower on Tuesday, failing to break a key resistance but hovered near a two-week high hit in the previous session on prospects of a less-hawkish Federal Reserve policy. The Fed is likely to wait at least until June policy meeting to decide whether to lift US interest rates again, Chicago Fed President Charles Evans said on Monday.
Spot gold was down 0.4 percent at $1,228.61 per ounce, as of 0556 GMT. In the previous session, it touched its strongest since March 6 at $1,235.50. US gold futures fell 0.4 percent to $1,228.60. "What we are seeing is a bit of washout in short-term positioning as gold is unable to surpass the strong resistance at $1,237," said Jeffrey Halley, senior market analyst at OANDA.
"But, there is no other way than looking bullish at gold for the moment. There are extended positions in dollar. We are going to see this dollar correction running for a while, which will support gold." Spot gold is expected to drop to $1,221 per ounce, following its failure to break a resistance at $1,237, Reuters technical analyst Wang Tao said. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.46 percent to 830.25 tonnes on Monday from 834.10 tonnes on Friday. Holdings fell for a third straight session on Monday.
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