Gold languishes near two-week low as firm dollar weighs

[BENGALURU] Gold prices held near two-week lows on Thursday, pressured by a stronger US dollar, while investors awaited a policy decision by the European Central Bank (ECB) due later in the day.

Spot gold was unchanged at US$1,789.39 per ounce by 12.54am GMT, after touching its lowest level since Aug 26 at US$1,781.30 in the previous session.

US gold futures eased 0.1 per cent to US$1,790.80.

The dollar was buoyed by cautious risk sentiment, denting the bullion's appeal for those holding other currencies.

ECB's policy decision is due at 11.45am GMT and it is expected to take a token step towards unwinding the pandemic-era emergency economic aid while still signalling copious support for years to come.

Meanwhile, several Federal Reserve policymakers on Wednesday signalled that the US central bank remains on track to trim its massive asset purchases this year, despite the slowdown in jobs growth seen in August and the impact a resurgence in Covid-19 cases.

Non-yielding gold tends to gain in a low interest-rate environment, while some investors also view the metal as a hedge against higher inflation that could follow stimulus measures.

The US economy "downshifted slightly" in August as the renewed surge of the coronavirus hit dining, travel and tourism, the Fed reported Wednesday.

The World Platinum Investment Council said on Thursday it now expects the global platinum market to be in surplus this year as mine supply ramps up and investment demand falls.

Platinum dropped 0.4 per cent to US$975.78 per ounce while silver fell 0.1 per cent to US$23.94.

Palladium eased 0.2 per cent to US$2,245.89. Prices fell to their lowest level since Feb 2 at US$2,213.95 on Wednesday.

REUTERS