Gold prices bounce after Swiss poll

Frankfurt (Nov 20)  Gold prices rose in European trade on Thursday, bouncing back from losses in the previous session after a Swiss poll showed weaker support for a forthcoming national referendum that would force the central bank to increase its gold reserves.

Spot gold was trading at $US1,189.10 a troy ounce, up 0.6 per cent, in morning European trade.

According to a gfs.bern group poll Wednesday, only 38 per cent of respondents were in favor of the 'Save Our Gold' initiative to force the Swiss National Bank to hold a fifth of its assets in the form of gold reserves and agree never to sell them in future. The poll showed 47 per cent were against the move, which would restrict the SNB's ability to formulate monetary policy.

"The 'Miracle' the industry has been looking for of late is the Swiss vote," said analysts at Numis Securities. "Gold initially traded [down roughly] 2 per cent on the poll result, then rallied back."

The referendum is to be held on November 30.

Elsewhere, the usually market-moving Federal Open Market Committee meeting minutes release received scant attention.

"The minutes of the most recent meeting of the US Federal Reserve were all but ignored by the market as they contained no major surprises. The members of the FOMC left no-one in any doubt about their will to continue normalizing monetary policy," said analysts at Commerzbank.

Nevertheless, those holding the dollar-denominated yellow metal are likely to keep one eye on the greenback.

"The precious metals will continue to be guided by dollar moves on the whole. Gold seems to have found a ceiling for the time being around $US1,200 and a floor around $US1,175," said David Govett, head of precious metals at Marex Spectron.

All the precious metals were higher. Silver was up 0.9 per cent at $US16.257 an ounce, platinum was up 1.3 per cent at $US1,197.90 an ounce, and palladium was up 0.5 per cent at $US765.00 an ounce.

Source: BusinessSpectator