Gold down on technical trading despite weaker U.S. equities

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday as technical trading put pressure on the precious metal, despite weaker U.S. equities.

The most active gold contract for April delivery fell 0.8 U.S. dollars, or 0.07 percent, to settle at 1,127.20 dollars per ounce. Technical trading put pressure on the precious metal as several weeks of upward pressure due to falling U.S. equities culminated in the precious metal hitting a support level. However, gold was prevented from falling further and kept in a very narrow trading range as the U.S.

Dow Jones Industrial Average fell. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven. The U.S. Dollar Index, a measure of the greenback against a basket of major currencies, fell by 0.2 to 98.85 as of 1800 GMT.

Gold and the dollar typically move in opposite directions. The precious metal was put under further pressure as a report released by the U.S. Department of Commerce on Tuesday showed motor vehicle sales at a 14.1 million rate in the United States. Analysts note that this was better-than-expected, and contributed to economic growth throughout 2015.

The precious metal's price was put under further pressure as the market remains unsure of when the next rate hike. Traders are wagering that, at the earliest, the Fed may raise rates from 0.50 to 0.75 during the April Federal Open Market Commitee (FOMC) meeting.

According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 14 percent for the March meeting, and 16 percent at the April meeting.

Traders are waiting for the release of other economic data later this week, as the Automated Data Processing employment report is due out on Wednesday and the big January jobs report is due out on Friday, along with the international trade report.

Silver for March delivery dropped 5.4 cents, or 0.38 percent, to close at 14.289 dollars per ounce. Platinum for April delivery fell 14.4 dollars, or 1.65 percent, to close at 855.70 dollars per ounce.