Gold remained poised above $1,200 on Thursday morning, with a move in either direction on the cards after the ECB’s policy meeting this afternoon.
The spot gold price was last $3.50 lower at $1,204.20/1,205 per ounce and down from a session high of $1,210.20 – it has traded in a narrow intraday range of $8 after improvements in oil prices yesterday bolstered commodities sentiment.
“The gold price is looking relatively robust at present [despite] a still appreciating US dollar,” Commerzbank said in a note
The geenback hit a fresh two-year high against the euro this morning at 1.2294.
“The market was confused yesterday by statements about Chinese gold demand made by a senior World Gold Council official from Asia. He claimed that gold demand in China is set to total 950-1,000 tonnes this year and thus fall short of last year’s record high of around 1,275 tonnes,” it added.
In today’s data, the EU retail PMI for November at 48.9 was up on the previous month’s 47.0; still to come is the EU minimum bid rate alongside the press conference at 13:30 London time, which will be scrutinised for any indication of easing measures from the ECB.
“[ECB president Mario] Draghi’s recent dovish comments have suggested a more aggressive stance by the central bank to tackle weak growth and productivity figures as well as persistently low inflation,” MKS Capital said in a note.
A move towards QE would be a signal of weakness, giving the dollar a heavy boost and putting heavy downside pressure on gold prices just as buying pressure begins to return.
But the bank is not likely to announce a move towards QE today and will instead await the results of its TLTRO and ABS stimulus measures, Commerzbank predicted.
“Gold is well placed to push higher to retest the June 2010 high on reduced US dollar upside should the ECB fail to announce a QE programme today,” FastMarkets analyst Tom Moore said.
Out of the US today, weekly unemployment claims and speeches from two FOMC members are due before the blockbuster non-farm payroll data on Friday.
In the other metals, silver at $16.46/16.51 per ounce was up 11 cents, trading within a tight 16-cent intraday range.
In the PGMs, which have been bolstered by strong US vehicle sales data in the earlier in the week, platinum was last $17 higher at $1,236/1,241 per ounce and near one-month highs, while palladium was up $8.50 at $799/804.
(Editing by Mark Shaw)
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