Gold fell to a fresh 3-1/2 month low on Wednesday, adding to sharp overnight losses, on fears slowing demand in top consumer China and as strong U.S. economic data blunted the metal’s investment-hedge appeal.
Spot gold dropped to $1,260.74 an ounce, its weakest since early February, before steadying at $1,264.65 by 0258 GMT. The metal slid 2.3 percent in the previous session – its biggest one-day drop since December.
Gold had been largely steady in the last few weeks, with technical analysts citing gold’s recent pennant chart formation, also known as a flag because of its triangular shape, which represents a brief consolidation with narrowing price ranges before the previous market move is resumed.
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