Gold moved lower on Wednesday on technical selling but the yellow-metal still managed to remain above its 50-day moving average.
Spot gold was last $13.50 lower at $1,188.90/1189.80 per ounce, with trade ranging from $1,185.50 to $1,204.90.
Price action was initially confined to tight ranges amid a lack of drivers but the action picked up during the afternoon benchmarking session, when a large imbalance between buying and selling volume prompted a swift $10 liquidation.
The ask volume in round one of the LBMA Gold Price auction hit 122,950 ounces compared with 40,000 ounces on the bid, with the starting price at $1,197.00. By round eight, there was differential far above 100,000 ounces between buyers and sellers at 149,090 ounces on the ask of $1,191.25.
According to ICE rules, the maximum differential is 20,000 ounces, with the imbalance shared out among the direct participants equally, irrespective of whether they have entered interest into the auction.
By round 12, the price was decided at $1,189.25, with 105,940 ounces on the sell and 100,860 on the bid.
Traders suggested that the move had largely been expected, with the gold market apparently very vulnerable at present.
“Within the range, nothing really fundamental has changed in gold,” Joni Teves, an analyst at UBS said in a telephone interview. “Probably people were looking at the technical level, specifically the 50-day moving average which gold is really hovering (around).”
But there was some positive data out of the US, where home sales in March reached their highest annual rate in 18 months, with total existing home sales rising 6.1 percent to 5.19 million units, according to the National Association of Realtors (NAR).
Home sales have increased for six consecutive months and are up 10.4 percent over last year.
The dollar, meanwhile, was down less than a cent against the euro, while the Dow Jones industrial average and S&P were up 0.2 and 0.3 percent respectively.
In the other precious metals, the results were similar with silver down 22 cents at $15.76/15.81, platinum falling $16 to $1,129/1,134 and palladium sinking $8 to $756/761.
(Edited by Tom Jennemann)
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