September 11, 2019
Gold prices inch higher; all eyes on ECB meet
(Reuters) - Gold prices edged higher on Wednesday, snapping a four-day losing streak on technical buying, while investors awaited European Central Bank's meeting where it is widely expected to cut interest rates.
Spot gold was up 0.3% at $1,490.09 per ounce, as of 0414 GMT. In the previous session, prices fell to their lowest since Aug. 13 at $1,483.90.
U.S. gold futures were little changed at $1,498.8 an ounce.
"The ECB is expected to reduce further the interest rate into negative territory... The meeting could serve as a potential catalyst (for gold) and investors are already buying into the rate cut expectations," said Margaret Yang Yan, a market analyst at CMC Markets.
Given that gold has had such a deep correction from its recent peak, investors are buying on dips, Yan added.
Bullion prices have shed more than 4%, or over $60, in less than a week, mainly hurt by a broad uptick in risk appetite.
ECB policymakers are leaning toward a package that includes a rate cut, a pledge to keep rates low for longer and compensation for banks over the side-effects of negative rates, five sources familiar with the discussion said last week.
The U.S. Federal Reserve is also widely expected deliver an interest rate cut next week.
"The big picture is global central banks are willing to lower interest rates and even carry out more quantitative easing to spur growth... In the mid to long term view, lower interest rate environment is bullish for gold price," Yan said.
Gold prices are up about 18%, or over $200, since hitting year's low of $1,265.85 in May, supported by monetary easing by major central banks, the prolonged U.S.-China trade spat and fears of a global economic slowdown.
On the trade front, a senior White House adviser tamped down expectations on Tuesday for the next rounds of U.S.-China trade talks, urging investors, businesses and the public to be patient
about resolving the trade dispute.
Spot gold still targets $1,453, as it has cleared a support at $1,497 per ounce, according to Reuters technical analyst Wang Tao.
Meanwhile, the dollar index was steady, while Asian stock markets held firm and bond yields rose on Wednesday.
Among other precious metals, silver rose 0.5% to $18.10 per ounce.
Palladium was flat at $1,561.14 per ounce, while platinum gained 0.6% to $936.05.