Investing.com - Gold and silver prices fell to the lowest levels of the session on Wednesday, after data showed that manufacturing activity in the New York-region improved at the fastest pace since May 2012 this month.
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On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,235.20 a troy ounce during U.S. morning trade, down 0.8%. Gold prices fell to a daily low of USD1,234490 a troy ounce earlier.
Futures were likely to find support at USD1,226.60 a troy ounce, the low from January 10 and resistance at USD1,254.90, the high from January 14.
Meanwhile, silver for March delivery dropped 1.3% to trade at USD20.02 a troy ounce. Comex silver prices slumped to a session low of USD19.97 a troy ounce earlier in the day.
Silver future prices were likely to find support at USD19.54 a troy ounce, the low from January 10 and resistance at USD20.60, the high from January 14.
The Federal Reserve Bank of New York said that its general business conditions index jumped to 12.51 in January from a reading of 2.22 in December. Analysts had expected the index to rise to 3.75 in January.
A separate report showed that producer prices increased by a seasonally adjusted 0.4% in December, matching forecasts, after falling 0.1% in November. The core producer price index eased up 0.3% last month, above expectations for a 0.1% increase, after rising 0.1% in November.
The upbeat data helped bolster expectations that the economic recovery in the U.S. will continue to deepen this year and offset concerns over last week’s surprising poor nonfarm payrolls report for December.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.55% to trade at 81.19. A stronger U.S. dollar usually weighs on gold, as it dampens the metal''s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to scale back stimulus. The central bank is scheduled to meet January 28-29 to review the economy and assess policy.
Elsewhere on the Comex, copper futures for March delivery fell 0.4% to trade at USD3.324 a pound.
Copper prices moved lower after data showed that Chinese bank lending and money supply growth for December came in below expectations, underlining concerns over liquidity levels.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.