Gold price edges lower ahead of ECB meeting

New York (July 20)  Gold prices inched lower on Thursday as investors awaited a meeting of the European Central
Bank later in the day for clues on the outlook for its stimulus programme, with a firmer dollar also weighing on the precious
metal.

The ECB is expected to lay the groundwork for an autumn policy shift when it meets, emphasising improved growth while
tempering expectations after previously setting off a mini-tantrum in financial markets.             

That comes after the Bank of Japan kept monetary policy steady and pushed back against the timing for achieving its 2
percent inflation target.            

"Investors remained cautious heading into (Thursday's) ECB meeting, where there are expectations of a more hawkish stance,"
ANZ research said in a note.  

Spot gold fell 0.2 percent to $1,237.86 per ounce at 0732 GMT.   

U.S. gold futures for August delivery fell 0.3 percent to $1,237.80 per ounce.
    The euro held near a 14-month high against the dollar on
Thursday as investors look to hints from the ECB on tapering of
its stimulus.      
    The dollar index        was up 0.12 percent at 94.889
against a basket of currencies, but was not far from multi-month
lows hit earlier this week on a fading outlook for a hike in
U.S. interest rates.
    "Overall, a degree of cautiousness is probably warranted in
the near-term. But more broadly, a relatively measured move
higher with some periods of consolidation should ultimately be
healthy for the market," said Joni Teves, strategist for UBS.  
 
    Spot gold may consolidate in a range of $1,236-$1,244 per
ounce for one day before rising towards $1,249, as suggested by
a Fibonacci projection analysis, said Reuters technical analyst
Wang Tao.
    Gold prices will be supported as long as recent weakness in
the U.S. dollar persists, said Yuichi Ikemizu, Tokyo branch
manager at ICBC Standard Bank.
    "I don't really expect prices to go any lower as I think
there is support at the $1,200 an ounce level and people are not
so bearish anymore."
     Meanwhile, holdings at the SPDR Gold Trust      , the
world's largest gold-backed exchange-traded fund fell 0.65
percent to 816.13 tonnes on Wednesday from 821.45 tonnes on
Tuesday.            
    In other precious metals, silver slipped 0.3 percent
to $16.20 per ounce, after touching its highest in over two
weeks at $16.36 in the previous session.
    Platinum  declined 0.5 percent to $913.50 per ounce.
Palladium  also dropped 0.1 percent to $855.25 per ounce.
It hit a three-week high of $872.25 an ounce in the previous session.

Reuters