PRECIOUS-Gold extends gains to 5-month high ahead of ECB meeting

* ECB meets on Thursday, expected to set stimulus measures * Dollar index weakens as yen gains * SPDR fund sees more inflows (Adds analyst comments, dollar move) By A. Ananthalakshmi SINGAPORE, Jan 21 (Reuters) – Gold climbed to a fresh five-month high on Wednesday as a softer dollar, worries over the global economy and uncertainty over whether the European Central Bank would announce stimulus measures pushed investors towards the safe-haven metal. Financial markets have been nervous about Thursday’s ECB meeting, at which the bank is widely expected to unveil a quantitative easing programme. That is likely to boost demand for bullion, but investors are treading with caution on the impact any measures might have on the euro. The metal has done well recently, despite the euro’s trading near 11-year lows. “Bullion’s recent divergence from moving in tandem with the euro to the opposite of the euro is attributed to its appeal as a perceived safe-haven asset,” said HSBC analyst James Steel. “While we do not discount further safe-haven-inspired gains in gold, the yellow metal may be in need of a price consolidation, given its 9 percent gain in less than three weeks of trading so far this year,” Steel said, adding that softer physical buying might also keep a check on rallies. Spot gold rose 0.3 percent to $ 1,297.60 an ounce, its highest since August, by 0342 GMT. The dollar lost some ground as the yen strengthened after the Bank of Japan kept its monetary policy steady. The dollar index was down 0.2 percent. Safe-haven and technical buying was behind gold’s 1 percent jump on Tuesday. Bullion has performed well since the beginning of the year as its safe-haven appeal has been burnished by uncertainties in Europe, including a Greek election on Sunday. Polls suggest anti-bailout party Syriza will win, which may set off fresh turmoil in the euro zone. Worries over the health of the global economy have added to its demand. On Tuesday the IMF cut its forecast for global growth in 2015 and called on governments and central banks to pursue accommodative monetary policies and reforms. Improving investor confidence was seen in the holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fun. The fund saw holdings jump 1.55 percent to 742.24 tonnes on Tuesday. Other precious metals have got a boost along with gold. Silver was higher by nearly 1 percent on Wednesday at $ 18.06 an ounce. It has gained 15 percent so far this month. Palladium was up for a third straight session, while platinum was steady. PRICES AT 0342 GMT Metal Last Change Pct chg Spot gold 1297.6 4.04 0.31 Spot silver 18.06 0.13 0.73 Spot platinum 1273.5 -0.9 -0.07 Spot palladium 778 6.3 0.82 Comex gold 1297.7 3.5 0.27 Comex silver 18.105 0.149 0.83 Euro 1.1571 DXY 92.814 COMEX gold and silver contracts show the most active months (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and Alan Raybould)

You may also like...

Rules of Discussion on PRECIOUS-Gold extends gains to 5-month high ahead of ECB meeting

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.
4. Providing Advice/Recommendations/Tips is fine but it should be free. Members cannot ask to be paid for it. Paid Advice is strictly prohibited
5. Spam links are not allowed. Too much promotion or using Contact info in ID will lead to account ban.
IMP : Members are requested to flag any violations to keep Forum Clean.
Loading comments …