Gold price steady on firmer dollar ahead of ECB policy meeting
New York (Mar 7) Gold prices steadied on Thursday as dollar traded near its more than two-week high, while a lacklustre appetite for riskier assets offered some support to the safe-haven metal ahead of European Central Bank's (ECB) policy meeting due later in the day.
Spot gold was down 0.1 per cent at $1,284.59 per ounce, as of 0722 GMT. Earlier in the session, the bullion rose 0.1 per cent to $1,288.34 per ounce. US gold futures slipped 0.2 per cent to $1,284.90 an ounce.
The dollar index, which tracks the greenback against major currencies, was holding near 97.008, its highest since February 19, posted earlier in the week.
“The major issue is the stronger US dollar. There is some support for safe-haven assets. Equities in Asia have given up gains and that reflects the pressure we are seeing on risk assets,” said Michael McCarthy, chief market strategist, CMC Markets.
Asian shares eased on Thursday, as investors showed caution over the outlook for global growth as they awaited the outcome of Sino-US trade negotiations.
The Organisation for Economic Co-Operation and Development cut forecasts again for the global economy in 2019 and 2020 cascading concerns on global growth.
“It seems that practically all major global economies are experiencing varying degrees of slowdown and at this stage we seem to be no closer to bottoming out,” INTL FCStone analyst Edward Meir said in a note, adding that it “should be constructive for gold.”
Meanwhile, US President Donald Trump said on Wednesday that trade talks with China were moving along well and predicted either a “good deal” or no deal.
“The next potential event for gold is the ECB meeting and if we get a dovish signal we could see gold test that $1,300 level again. Any addressing of the issues around long-term support programmes for bank funding could support gold,” CMC Markets' McCarthy said.
The ECB is expected to slash growth forecasts and is likely to provide its strongest signal yet that fresh stimulus is coming in the form of more cheap loans.
“The yellow metal benefitted from a softer greenback in early session pricing,” MKS PAMP said in a note.
“However, a firmer dollar later in the day saw bullion to the session low as participants exhibited caution leading into Friday's US jobs data.”
Markets are awaiting the US non-farm payroll data on Friday.
Among the other precious metals, palladium dipped 0.3 per cent to $1,533.36 per ounce, while silver was down 0.2 per cent at $15.04 per ounce, after slipping to its lowest since Dec. 27 in the previous session.
Platinum dipped 0.2 per cent to $825.33 per ounce, after touching its lowest since Feb. 22 at $818.50 earlier in the day.
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