Gold price rises on weak USD, Traders await ECB outcome

ECB meeting is approaching today and this key event did not leave the financial markets untouched. Gold price rises on weak USD, as investors are anticipating the result of the gathering. What is in the near future for gold? 

8 September, AtoZForex – Gold is in the higher trend with the weaker dollar this Thursday, as the traders are anticipating the European Central Bank (ECB) policy meeting result. The European economy is currently is expected to demand more stimulus from ECB, however, it may not be the outcome of ECB gathering later today.

Gold edges higher, as traders await ECB outcome

Gold price emerged at 0.2 percent higher at $1,347.01 an ounce by 0657 GMT, where the US gold futures also went up 0.2 percent to $1,351.70. Vyanne Lai, the analyst at NAB, stated:

“While weaker-than-expected U.S. economic data over the past week point to the diminished market-expected probability of a rate hike in September, we believe that the outlook for gold price movements is likely to be mildly bearish over the rest of 2016.”

Gold seems to be steady for the near term

Some of the US Federal Reserve (Fed) authorities have made hawkish comments earlier, pushing the interest rates higher. Accelerating interest rates across the US boost the opportunity cost of holding non-yielding gold. Also, the increase in the US rates enlarges the advance in the dollar, in which gold is priced. James steel, the analyst at HSBC, said:

“In the absence of bullish factors, gold tends to recede rather than hold steady. This may be the case now, and we may see further profit-taking near term. The next rate rise should put a near-term floor on gold prices. Also, bond yields remain low, another supportive factor. That said, gold looks to be on the defensive, at least near term.”

Also: Watch today’s ECB press conference live at AtoZForex

Spot gold might go down below $1.352 an ounce or go back over to support at $1.327, as it faces the resistance at this level, according to analyst Wang Tao. The dollar index, which measures the dollar against a basket of currencies, slides about 0.1 percent at 94.890. A firmer dollar makes greenback-denominated gold more expensive for those, who hold other currencies.

As gold price rises on weak USD, the holdings of the world’s largest gold-backed exchange traded fund, SPDR Gold Trust went down 0.03 percent to 951.81 tons yesterday. Platinum was up 0.6 percent at $1090.95, after reaching its two0week top this Tuesday. Spot silver also went up 0.6 percent to $19.87, its highest point in over three weeks in the earlier session.

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