September 8, 2016
Gold Steady on Weaker Dollar; ECB Stimulus in Focus
(Reuters) - Gold was steady on Thursday, after dipping 0.3 percent in the prior session, as the dollar remained weak and investors awaited cues on monetary stimulus from a European Central Bank policy meeting due later in the day.
The euro zone economy is widely expected to need more stimulus from the European Central Bank (ECB), but it may not come at the bank's policy meeting on Thursday.
"There is just not enough (assets) for the ECB to buy. If we see more buying, it will give a fillip to gold," said Jeffrey Halley, business development and market strategist with OANDA Asia Pacific.
"As long as the dollar remains weak we can see gold test $1,350 and make its way up to $1,375-80 levels," he said.
"Overall it is quite constructive for gold to move quite a lot higher in the medium term. Any dips to $1,300-$1,320 levels represent good value."
Spot gold was little changed at $1,346.10 an ounce by 0401 GMT.
U.S. gold futures were nearly flat at $1,350.30.
Several U.S. Federal Reserve officials have made hawkish comments in the past couple of days, making a push for rate increases.
Rising U.S. interest rates increase the opportunity cost of holding non-yielding bullion and boost the dollar, in which gold is priced.
"In the absence of bullish factors, gold tends to recede rather than hold steady. This may be the case now, and we may see further profit taking near term," HSBC analyst James Steel said.
"Any uncertainty, geopolitical tensions and, most importantly, a sense that the Fed will push back the next rate rise should put a near-term floor on gold prices. Also bond yields remain low, another supportive factor. That said, gold looks to be on the defensive, at least near term."
Spot gold faces a resistance at $1,352 per ounce, it may either hover below this level or retrace to a support at $1,327, according to Reuters technical analyst Wang Tao.
The dollar index, which measures the greenback against a basket of currencies, was down about 0.1 percent at 94.890.
A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.03 percent to 951.81 tonnes on Wednesday.
Spot silver rose 0.3 percent at $19.82. It touched an over three-week high in the previous session.
Platinum rose 0.3 percent to $1088.20, after hitting a two-week high on Wednesday. Palladium was up 0.8 percent at $692.50. It hit an over-two week high in the prior session.