Gold Silver Reports – Gold prices steadied on Thursday as global equities fell and the US dollar held near a week low versus the euro before a European Central Bank (ECB) 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-US investors.
“The risk is that the ECB will sound as dovish as they can. (Also) the stocks are at extremely high levels in the US 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% to $1279.08 an ounce at 3.51pm. US gold futures for December delivery rose 0.1% 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.
Read More: Gold Price Report October 26, 2017
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 US, 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. US 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% to $16.99 an ounce. Platinum rose 0.3% to $921.50 an ounce, while palladium climbed 0.9% 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. – Neal Bhai Reports