Gold price inches up on weaker dollar, ECB stimulus in focus
London (Sept 8) Gold edged higher on Thursday on a weakerdollar, with investors looking to the outcome of a EuropeanCentral Bank policy meeting later in the day for signs ofeconomic stimulus.
The euro zone economy is widely expected to need morestimulus from the ECB, but it may not come at Thursday'smeeting. "There are just not enough (assets) for the ECB to buy. Ifwe see more buying, it will give a fillip to gold," said JeffreyHalley, business development and market strategist with OANDAAsia Pacific.
"As long as the dollar remains weak, we can see gold test$1,350 and make its way up to $1,375-80 levels," he said.
Spot gold was up 0.2 percent at $1,347.01 an ounce by 0657 GMT.
U.S. gold futures rose 0.2 percent to $1,351.70
"While weaker-than-expected U.S. economic data over the past week point to diminished market-expected probability of a rate hike in September, we believe that the outlook for gold price movements is likely to be mildly bearish over the rest of 2016,"said NAB analyst Vyanne Lai.
Several U.S. Federal Reserve officials have made hawkish comments in the past couple of days, making a push for rate increases. Rising U.S. interest rates increase the opportunity cost ofholding non-yielding bullion and boost the dollar, in which goldis priced.
"In the absence of bullish factors, gold tends to recede rather than hold steady. This may be the case now, and we may see further profit-taking near term," HSBC analyst James Steel said.
"The next rate rise should put a near-term floor on goldprices. Also bond yields remain low, another supportive factor.That said, gold looks to be on the defensive, at least near term."
Spot gold faces resistance at $1,352 per ounce, it may either hover below this level or retrace to support at $1,327,according to Reuters technical analyst Wang Tao. The dollar index , which measures the greenbackagainst a basket of currencies, was down about 0.1 percent at94.890.
A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
Holdings of SPDR Gold Trust , the world's largestgold-backed exchange-traded fund, fell 0.03 percent to 951.81tonnes on Wednesday. Spot silver climbed 0.6 percent at $19.87. It touchedits highest in over three weeks in the previous session.
Platinum rose 0.6 percent to $1090.95, after hittinga two-week peak on Wednesday. Palladium was up 1 percent at $694.30. It touched an over-two week high in the prior session.
Source: Reuters
