Gold steady as appetite for risk wanes

Bengaluru — Gold prices steadied on Thursday as lacklustre appetite for riskier assets offered some support to the safe-haven metal, while a firm dollar limited gains ahead of the European Central Bank’s (ECB) policy meeting due later in the day.

Spot gold was steady at $1,286.49/oz, as of 3.41am GMT. US gold futures were down 0.1% at $1,287.

The dollar index, which tracks the greenback against major currencies, was holding near its more than two-week high posted earlier in the week.

“There is some support for safe-haven assets. Equities in Asia have given up the gains and that reflects the pressure we are seeing on risk assets,” said Michael McCarthy, chief market strategist at CMC Markets, adding, strong dollar is limiting gains.

Asian shares eased on Thursday, with caution prevailing as investors awaited some kind of resolution to China-US trade negotiations.

US President Donald Trump said on Wednesday that trade talks with China were moving along well and predicted either a “good deal” or no deal between the world’s two largest economies.

“The next potential event for gold is the ECB meeting and if we get a dovish signal we could see gold test that $1,300 level again. Any addressing of the issues around long-term support programmes for bank funding could support gold,” McCarthy said.

The ECB is expected to slash growth forecasts and is likely to provide its strongest signal yet that fresh stimulus is coming in the form of more cheap loans.

Meanwhile, the Organisation for Economic Co-Operation and Development (OECD) cut forecasts again for the global economy in 2019 and 2020, as it warned that trade disputes and uncertainty over Brexit would hit world commerce and businesses cascading concerns on global growth.

“It seems that practically all major global economies are experiencing varying degrees of slowdown and at this stage, we seem to be no closer to bottoming out,” INTL FCStone analyst Edward Meir said in a note, adding that it “should be constructive for gold”.

On the technical front, gold may keep hovering above a support level at $1,283/oz for one or two days, before resuming its downtrend, said Reuters analyst Wang Tao.

Markets are also awaiting the US nonfarm payroll data on Friday.

Among the other precious metals, silver lost 0.1% to $15.06/oz, after slipping to its lowest since December 27 in the previous session.

Palladium slipped 0.2% to $1,535.67/oz, while platinum dipped 0.3% to $823.97/oz, after touching its lowest since February 22 at $819 earlier.

Reuters