Gold fails to hold post-ECB gains
Frankfurt (Jan 23) Gold prices were lower in Europe on Friday amid profit-taking and a stronger dollar as the yellow metal failed to hold on to the gains made in the wake of Thursday's move by the European Central Bank.
Spot gold was trading at $US1,294.42 a troy ounce, down 0.6 per cent, in morning European trade.
The yellow metal rose above $US1,300 for the first time in five months in the previous session after ECB President Mario Draghi announced a bigger-than-expected program of quantitative easing, but many observers felt that it had already been priced in.
"The inability of gold to hold on to $US1,305 and instead closing the session at $US1,301 suggests that the gold bulls are losing steam," said Howie Lee, an investment analyst at Phillip Futures.
The announcement that the ECB will carry out a bond-buying program of 60 billion euros ($US57.7 billion) a month until September 2016 -- a larger number than anticipated -- has eliminated some of the uncertainty surrounding the eurozone.
However, there are still doubts over how well QE will work, as well as concerns over this weekend's elections in Greece, which could spark another bout of safe-haven buying of the investment metal.
"We would expect gold to generally hold steady until the result of the Greek election is known. Gold has moved a lot already this year so some consolidation at lower levels would not be too surprising," said William Adams, head of research at Fastmarkets.
All the precious metals were trading lower. Silver was down 0.6 per cent at $US18.206 an ounce, platinum was down 0.5 per cent at $US1,273.11 an ounce, while palladium was down 0.2 per cent at 770.00 an ounce.