Gold extends losses after U.S. GDP data

Investing.com - Gold prices fell to the lowest levels of the session on Wednesday, after data showed that the U.S. economy contracted less than initially expected in the first three months of the year.

The Commerce Department said gross domestic product contracted at an annual rate of 0.2% in first quarter, in line with expectations and compared to a previous estimate of a 0.7% contraction.

The data showed consumer spending rose 2.1% in the three months ended March 31, slightly above expectations for a 1.9% gain, and compared to an initial estimate of a 1.8% increase. Consumer spending typically accounts for nearly 70% of U.S. economic growth.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange hit an intraday low of $1,170.50 a troy ounce, the weakest level since June 8, before trading at $1,171.20 during U.S. morning hours, down $5.40, or 0.46%.

Futures were likely to find support at $1,168.50, the low from June 8, and resistance at $1,200.80, the high from June 22. A day earlier, gold lost $7.50, or 0.63%, to close at $1,176.60 amid renewed expectations for higher U.S. interest rates later this year.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Also on the Comex, silver futures for July delivery tacked on 4.5 cents, or 0.29%, to trade at $15.78 a troy ounce, while copper for July delivery rose 1.9 cents, or 0.75%, to trade at $2.632 a pound.

Meanwhile, investors continued to monitor developments surrounding talks between Greece and its international creditors.

Market sentiment was hit after a Greek government official said Greek Prime Minister Alexis Tsipras told associates that some of Greece's latest proposed reform measures had not been accepted by creditors.

Greece has to repay € 1.6 billion to the IMF on June 30 or face going into default, which could trigger the country’s exit from the euro area.