March 10, 2016
Gold Dips as Stocks, Dollar Advance Ahead of ECB Meeting
(Reuters) - Gold dipped for a third day on Thursday, slipping further away from a 13-month high hit last week, as Asian stocks and the U.S. dollar firmed on expectations the European Central Bank will enact more stimulus to bolster euro zone economies.
The euro was under pressure, with the ECB expected to cut the deposit rate, announce more asset purchases and possibly introduce tiered interest rates like the Bank of Japan in a bid to boost inflation, according to a Reuters poll.
Spot gold was off 0.1 percent at $1,251 an ounce by 0248 GMT, pulling further away from a 13-month peak of $1,279.60 reached on March 4.
"Everyone's just waiting for the ECB meeting," said William Wong, assistant head of dealing at Wing Fung Precious Metals in Hong Kong.
If the ECB disappoints yet again, as they did in December when policymakers delivered less monetary easing than they had suggested, Wong said that could revive the euro and send gold to $1,280.
U.S. gold for April delivery dropped 0.4 percent to $1,252.30.
"We are not overly concerned about the pullback we saw in the past two days, as we think gold's uptrend remains intact as long as the metal closes above $1,246," technical analysts at ScotiaMocatta wrote.
"In our view, gold will likely consolidate here before taking a swing at $1,307," a level last seen in January 2015, they said.
Gold had benefited from low expectations that the U.S. Federal Reserve would lift interest rates at its policy meeting next week despite a recent raft of robust economic data including last week's forecast-beating employment report.
Headwinds in the global economy are likely to deter U.S. policymakers from raising interest rates soon after hiking them in December as central banks elsewhere ease policy to boost their shaky economies, analysts say.
Asian stocks edged up after New Zealand surprised markets with a rate cut, keeping investors primed for more stimulus from the ECB later in the day.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, recovered slightly to 25.49 million ounces on Wednesday, just below last week's 18-month high.
Spot silver was steady at $15.28 an ounce, platinum dropped 0.3 percent to $975.35 and palladium eased nearly 1 percent to $558.50.