April gold futures GCJ3 -0.06% advanced $2.50 to $1598.20 an ounce in Asia trading hours.
The metal had dropped $8.80, or 0.6%, on the Comex division of the New York Mercantile Exchange on Tuesday. Better-than-expected data on U.S. durable-goods orders helped dent the metal’s safe-haven appeal and contributing to a third straight session decline.
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“Despite the continued reverberations regarding the Cyprus bailout and its involvement of bank deposits, gold struggled to maintain the positive momentum created in the first two weeks of March, and instead, now looks very likely to move lower, towards $1,580 an ounce,” said strategist Xiao Fu at Deutsche Bank.
“That the U.S. appears the picture of stability and relative strength, has in our view, been a key contributor to the moribund performance of gold,” the strategist said.
“Over the past month gold ETF holdings have fallen over 6%, representing a liquidation of around 5 million ounce — the largest draw-down on record,” the strategist noted.