Gold prices turned lower Friday, seeing red for the third day in a row and erasing some early session gains after a sharp decline in the previous session.
Gold for August delivery retreated $3.00, or 0.2%, at $1,562.70 U.S. an ounce on the Comex division of the New York Mercantile Exchange.
The metal fell $50.30, or 3.1%, on Thursday, its sharpest decrease since early April on a slew of mostly negative macroeconomic global data and a hangover from disappointment with the U.S. Federal Reserve action earlier in the week.
In the absence of macroeconomic reports, gold will look at currencies for more direction, analysts at VTB Capital said in a note to clients.
There is, however, "limited downside in gold, and physical interest could well emerge near June lows. That is also near troughs where investor appetite kicked in last time," they said.
Support for gold is found around $1,540 U.S. an ounce and upside is limited to $1,640 U.S. for now, the analysts added.
Gold had traded higher in most of Asian and European trading hours and in early U.S. trading, but the European Central Bank’s decision to ease some collateral rules for bank loans boosted U.S. equities and the dollar and ate away at gold’s gains.
The ICE dollar index, which measures the greenback against a basket of six major global rivals, recently turned up to 82.379 from 82.353 in late Thursday North American session. The euro turned higher versus the U.S. unit after the ECB news.
Gold has been part of a broad selloff in commodities as investors turn more pessimistic about the global economy, and often has failed to secure any safe-haven flows as investors turn to cash and bonds as their fallback assets.
Among other metals, July silver was down 25 cents, or 1%, at $26.59 U.S. an ounce. Silver ended 5.5% lower on Thursday.
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