January 20, 2015
Gold near four-month high on worries over Europe, global economy
(Reuters) - Gold held firm just below a four-month high on Tuesday, underpinned by safe-haven bids on market volatility stoked by uncertainty over Europe's economy and global growth worries.
Traders were awaiting the European Central Bank policy meeting this Thursday, which could see the unveiling of a bond-buying stimulus package.
The Sunday election in Greece, where the anti-bailout party Syriza maintains a lead in the polls, also added to nervousness in the market.
Spot gold was steady at $1,277.16 an ounce at 0318 GMT, after easing 0.2 percent on Monday. The metal had jumped to a September peak of $1,281.50 on Friday, after a broad market rout prompted by Switzerland's unexpected move abandoned a cap on the franc.
"The expectation is gold will move higher towards $1,300, however we are likely to see a profit taking driven pull back with support for such a move lower sitting around $1,250," said MKS Group trader Sam Laughlin.
"The market will be watching the ECB meeting on Thursday for any quantitative easing announcement and if announced we should see moderate demand for the yellow metal."
The uncertainties have seen investors piling on to gold. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, climbed 13.7 tonnes to 730.89 tonnes on Friday, its biggest one-day inflow in nearly 3-1/2 years.
Also adding to gold's appeal as a hedge was growing worries over the global economy.
The International Monetary Fund on Tuesday lowered its forecast for global economic growth in 2015, and called on governments and central banks to pursue accommodative monetary policies and structural reforms to support growth.
However, in a rare glint of brightness amid the gloom over the global outlook, China reported its economy had not slowed as much as many had feared.
China's economic growth held steady at 7.3 percent in the fourth quarter from a year earlier, slightly better than expected but still hovering at its weakest since the global financial crisis.
Asian equities were higher after the Chinese data, while the dollar ticked up on weakness in the euro, keeping bullion's gains in check.