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Gold up on technical buying, focus shifts to ECB policy decision
[BENGALURU] Gold prices edged up on Thursday on technical buying after touching their highest in over two weeks the session before, with focus shifting to the outcome of a European Central Bank policy later in the day.
The ECB is set to keep policy unchanged but will likely lay the groundwork for more easing in December as it tries to sustain a long-awaited rebound in consumer prices.
"If the taper by the ECB does inject a more expensive euro that would mean a cheaper dollar, and gold should actually rally," said OCBC analyst Barnabas Gan.
Spot gold had risen 0.3 per cent to US$1,272.20 an ounce by 0430 GMT. On Wednesday, it had hit its strongest since Oct 5 at US$1,273.34.
US gold futures were up 0.3 per cent at US$1,273.20 an ounce.
"We're looking for gold prices to rally further into the year-end. The market is waiting for the outcome of the (US) presidential elections in November and what the Fed is going to do in December," said OCBC's Mr Gan.
"Gold rides on suspense and uncertainty and for the very reason we expect gold to touch about US$1,300 by the end of the year."
The safe-haven asset was fairly subdued after the third and final US presidential debate between Democrat Hillary Clinton and Republican Donald Trump.
"For the time being, the weaker dollar is giving gold a bit of a breather and prompting it to move higher," said INTL FCStone analyst Edward Meir.
"But, upside reversal in the dollar, coupled with a more robust rally in stocks, could easily sabotage the recent improvement we have been seeing."
Asian stocks advanced on Thursday, propelled by strong US earnings and oil prices near a 15-month high.
Spot bullion may rise to touch US$1,280 per ounce, as it has cleared resistance at US$1,265, according to Reuters technical analyst Wang Tao.
Meanwhile, spot silver was up about 0.2 per cent at US$17.67 an ounce.
Platinum fell 0.1 per cent to US$941.75, while palladium rose 0.7 per cent to US$640.10.