Gold price steadies ahead of ECB meeting
New York (Mar 8)) Gold steadied on Thursday as uncertainty ahead of a European Central Bank policy meeting and further news on U.S. trade tariffs kept the metal in a narrow range, though a stronger dollar pressured prices.
The dollar firmed after the White House indicated that key trading partners could be exempt from the steel and aluminium import tariffs it proposed last week.
Spot gold was at $1,325.69 an ounce by 1025 GMT, little changed from late on Wednesday, when it rose to a one-week high of $1,340.42 before closing 0.6 percent lower. U.S. gold futures were down 0.1 percent at $1,326.40.
ABN Amro analyst Georgette Boele said the dollar would remain the key driver of gold prices in the near term.
"The only reason we were up near $1,340 was because the dollar fell towards the end of last week," she said. "We have the ECB meeting today, which is more of a euro story. If speculators finally start taking profit on the euro
long position, that could reflect in a higher dollar."
The ECB is expected to keep policy unchanged on Thursday but
could tweak its accompanying statement to offer some clues about
plans to end its unprecedented bond purchases this year.
Friday's non-farm payrolls data for February, a key barometer
of the U.S. economy, is also being awaited for further clues on
the pace of Federal Reserve rate increases.
Gold is highly sensitive to rising U.S. interest rates, which
increase the opportunity cost of holding non-yielding bullion
while boosting the dollar, in which it is priced.
In the medium term gold will come under temporary pressure
from interest rate hikes, said Peter Fung, head of dealing at
Wing Fung Precious Metals in Hong Kong.
Gold traders are also awaiting further news on plans for U.S.
tariffs on some imported goods. The White House said late on
Wednesday that Canada, Mexico and possibly other countries may
be granted exemptions, at least for a while.
Trump will sign a proclamation establishing the tariffs
during a ceremony scheduled for 2030 GMT, a source familiar with
the situation said.
Silver was down 0.2 percent at $16.47 an ounce, while
platinum fell 0.4 percent to $948.70 after touching its
lowest since Jan. 4 at $943.
Palladium was down 0.1 percent at $968.50 after
dropping to its lowest since Feb. 9 at $961.55 on Wednesday.
