Gold price steadies ahead of ECB meeting

Feb 07 2013, 17:41 IST
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SummaryGold prices held to tight ranges on Thursday ahead of a European Central Bank (ECB) meet.

Gold prices held to tight ranges on Thursday ahead of a European Central Bank (ECB) meeting that could give further clues on monetary policy, setting the tone for the euro.

Platinum and palladium stayed close to their highest levels in almost a year and a half, boosted by a brightened economic outlook. The world's largest PGMs miner Anglo American Platinum also rejected criticism of its plan to mothball two mines and slash up to 14,000 jobs to restore profits.

Gold hit an intraday high at $1,680.95, before easing to stand flat on the day at $1,676.70 an ounce by 1038 GMT.

U.S. gold futures for April delivery fell 0.1 percent to $1,676.60 an ounce, while a weaker Japanese yen against the dollar sent gold futures on Tokyo Commodity Exchange (TOCOM) to another record at 5,081 yen a gram.

Analysts said investors will be alert for comments from ECB president Mario Draghi about any negative impact of a strong currency on the fragile euro zone economy.

"It is going to be interesting to see if the ECB says anything about currencies today," BofA Merrill Lynch analyst Michael Widmer said.

"But you need a bit more in terms of inflation pressures or monetary interventions by central banks in emerging markets for gold buyers to come back into the market," he added.

The euro, which often dictates gold's movements, could fall if Draghi voices concerns about the single currecy's recent sharp rise. But the central bank is seen as unlikely to contemplate an interest rate cut.

Bullion has struggled to make positive headway so far this year after signs of improvement in the global economy prompted some investors to shift to growth associated assets, such as platinum group metals (PGMs).

Gold physical activity also began to slow down ahead of the long Lunar New Year break, with premiums for gold bars in Hong Kong easing to $1 to $1.50 an ounce to the spot London price from as high as $1.70 last week.

China's gold production rose for a sixth consecutive year to hit a record 403 tonnes in 2012, keeping its ranking as the world's largest bullion producer, the Shanghai Securities News said on Thursday.


Platinum and palladium were steady after hitting 17-month highs in the previous session on positive economic data.

Platinum was down 0.2 percent at $1,730 an ounce, having risen to $1,740 on Wednesday, its strongest since September 2011. Palladium was little changed at $760.47 an ounce. The

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