Gold Stuck In A Range Ahead Of ECB; BOE
New York (Nov 7) Gold futures were trading in a very tight range in the electronic trades Thursday with the investors awaiting monetary policy decisions from central banks in Europe and the U.K., and gross domestic product (GDP) data from the U.S.
The policy committees of the European Central Bank (ECB) and the Bank of England will meet on Thursday, while in the U.S., third-quarter GDP data is due. The GDP data could indicate whether the U.S. economy is improving and comes just before Friday's much-anticipated non-farm payrolls data.
There are expectations that the ECB could cut rates or make some kind of liquidity provision at Thursday's meeting, following a plunge in inflation to 0.7 percent on year in October as well as the euro's recent strength.
Gloomy forecasts from the European Commission which said it expected the euro zone economy to shrink by 0.4% this year, coupled with PMI data on Wednesday which showed that manufacturing and services activity slowed in October have also bolstered expectations that the ECB will take action.
Gold for December delivery is trading up $0.5 to $1,318.3 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it rose $9.70, or 0.7%, to settle at $1,317.80 an ounce helped by a weaker U.S. dollar ahead of Friday’s nonfarm payrolls report.
In the currencies, the euro inched higher just hours ahead of a much-awaited central bank meeting, while the Australian dollar lost ground on weak data, with most other major pairs holding steady.
The euro was trading at $1.3528, up marginally from $1.3519 late Wednesday in North America, as the European Central Bank prepared to issue its latest policy decision.
MCX December gold futures are trading at Rs 30083 per grams and hit the high of Rs 30147 earlier today. The counter should face a resistance near Rs 30200 levels with support around Rs 29900-800 levels.
On Friday, the U.S. is due to release its monthly labor report — a much-watched indicator over whether the U.S. Federal Reserve will start to wind down its quantitative easing of monetary policy. The non-farm payrolls number is expected to have grown by around 120,000, analysts predicted.
Over the weekend, China will start a major political meeting — the so-called Third Plenum — where the country’s new leadership is expected to unveil a blueprint for economic policy for the next decade.
