Forexpros – Gold futures traded in a tight range on Thursday, swinging between small gains and losses as investors stuck to the sidelines ahead of the European Central Bank’s rate decision, while markets continued to monitor the latest news out of Greece.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,733.95 a troy ounce during early European morning trade, edging 0.15% higher.
The April contract traded in a range of USD1,742.05 a troy ounce, the session high and a daily low of USD1,728.45 a troy ounce.
Futures were likely to find support at USD1,712.65 a troy ounce, the low from February 7 and resistance at USD1,754.65, Wednesday’s high.
Following discussions on Wednesday, Greek political leaders stopped short of signing off on austerity measures after agreeing on all points of a bailout package except on pension cuts.
Reassurance from Prime Minister Lucas Papademos that a deal could still be reached later in the day helped lift the euro to an eight-week high against the U.S. dollar.
Greece needs to finalize a debt restructuring deal by early March as part of an agreement to receive a EUR130 billion bailout package and avert a messy sovereign debt default.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.2% to trade at 78.56. Gold prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies.
Gold prices found support after China’s National Bureau of Statistics said consumer price inflation rose by a seasonally adjusted 4.5% in January, accelerating from 4.1% in December.
Month-on-month, the consumer price index rose 1.5% in January from a month earlier, the largest monthly gain in four years.
Investors often purchase gold as a hedge against rising inflation, as gold prices tend to keep in step with consumer price increases.
Meanwhile, markets were also eyeing the European Central Bank’s policy meeting later Thursday. The ECB was expected to keep interest rates on hold at 1% but could signal it is ready to cut rates in March.
Elsewhere on the Comex, silver for March delivery rose 0.35% to trade at USD33.81 a troy ounce, while copper for March delivery shed 0.45% to trade at USD3.892 a pound.
Forexpros
