· Gold held steady early on Thursday, supported by a weaker dollar and lingering concerns over North Korea, as markets awaited the outcome of a European Central Bank (ECB) policy meeting later in the day.
Spot gold was little changed at $1,334.06 per ounce at 0407 GMT, after easing 0.3 percent in the previous session.
U.S. gold futures for December delivery were also flat at $1,339.50.
· The dollar was subdued on Thursday and the euro stood firm ahead of the ECB meeting where President Mario Draghi is expected to start laying the groundwork to withdraw monetary stimulus.
· “The major event for today is the ECB meeting for traders and if the ECB delivers any unexpected message during the conference that will spook the market and the gold price could benefit,” said Naeem Aslam, chief market analyst, Think Markets.
“The odds of geopolitical tensions escalating further are very high. If North Korea does another missile test, it will trigger risk-off trade and the yellow metal could benefit,” Aslam added.
· “The market is likely to continue focusing on geopolitical tensions, but it will start to shift focus to the Federal Reserve meeting in September, looking for details on reducing the balance sheet,” Samson Li, an analyst with Thomson Reuters-owned metals consultancy GFMS said.
“I expect some downward pressure on gold starting next week and a rebound in the dollar short-term” Li said.
· The two-day Federal Open Market Committee meeting (FOMC) is due to begin on Sept. 19 and the U.S. central bank is widely expected to leave rates unchanged.
· Trump reached a surprise deal with Democrats on Wednesday to raise the short-term U.S. debt ceiling, reducing concerns over a potential government shutdown and denting safe-haven demand.
· “Gold eased somewhat, following the deal... This helped push up the U.S. dollar, and led to an increase in equity markets,” said John Sharma, economist at National Australia Bank.
· Spot gold may drop into a range of $1,320-$1,325 per ounce as it has failed to break a resistance at $1,345, Reuters technical analyst Wang Tao said.
· Among other metals, silver was down 0.2 percent to $17.80 an ounce.
· Technically, December gold futures prices closed nearer the session low and saw some profit taking from recent gains. Prices Tuesday hit an 11-month high. The gold bulls still have the solid overall near-term technical advantage. Prices are in a steep two-month-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,378.00.Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,307.00. First resistance is seen at $1,350.00 and then at $1,360.00. First support is seen at Tuesday’s low of $1,331.10 and then at $1,325.00. Wyckoff's Market Rating: 8.0
Reference: Reuters,Kitco
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