Gold price steadies on weaker dollar; markets brace for ECB decision

New York (Oct 26)  Gold steadied on Thursday as global equities fell and the dollar held near a week low versus
the euro before a European Central Bank meeting, though risks for gold prevailed in the absence of any hawkish surprises from the ECB.

The ECB is expected to outline a scaling back of bond-purchases at its meeting later on Thursday, though the
decision is largely factored in and it will take a hawkish tone to push the dollar down further versus the single currency.

A strong dollar makes dollar-priced gold costlier for non-U.S. investors. "The risk is that the ECB will sound as dovish as they can.
(Also) the stocks are at extremely high levels in the U.S. but I think Europe is going to start playing catch up (so) I'm bearish on gold," said Fawad Razaqzada analyst at FOREX.com.

Spot gold edged up 0.2 percent to $1279.08 an ounce
at 1021 GMT. U.S. gold futures for December delivery
rose 0.1 percent to $1280.20 an ounce.
    Helping gold, global equities fell off peaks for a second
day as investors closely monitored the risk of aggressive
monetary tightening from central banks and underwhelming
corporate earnings.
    A fall in equities, seen as risky assets, tends to boost
safe haven gold.
    Still the biggest losses in equities were seen overnight in
the United States, with the mood in Asia calmer overnight and
with European stocks opening higher as investors awaited the ECB
decision.
    "The (gold) market still feels like it wants to try lower,
(though) there may just be a short squeeze to the topside
first," said gold trader MKS in a note.
    Also weighing on gold was speculation that the next Federal
Reserve chair could be a policy hawk, a factor that would boost
the dollar.
    U.S. President Donald Trump on Tuesday polled Republicans on
whether they would prefer Stanford University economist John
Taylor or current Fed Governor Jerome Powell for the job, and
more senators preferred Taylor.                         
    "A hawkish governor like Taylor could lead to a rise in bond
yields and be negative for the gold price," said John Sharma, an
economist with National Australia Bank.     

In other precious metals, silver rose 0.5 percent to
$16.99 an ounce.

Platinum rose 0.3 percent to $921.50 an ounce, while
palladium climbed 0.9 percent to $968.75 an ounce.
    "On current levels, a lot of bad news is priced into
platinum while palladium still looks due for a correction with
another dent in global car sales looming," said Julius Baer in a
note.