• Gold rebounded on Wednesday from a five-week low as an oil price slump pushed down stock markets and a weaker U.S. dollar made bullion cheaper for holders of other currencies.
• The U.S. Treasury yield curve was the flattest in nearly a decade as investors evaluated hawkish Federal Reserve policy and softening inflation.
• "The change in sentiment has helped gold," ABN AMRO analyst Georgette Boele said.
Strong technical support at the 200-day moving average at around $1,237 would provide the floor from which gold could climb back toward $1,275, said Boele.
• Spot gold <XAU=> was up 0.3 percent at $1,246.67 an ounce by 3:27 p.m. EDT (1927 GMT), while U.S. gold futures <GCcv1> settled up 0.2 percent at $1,245.80.
• Gold has fallen around 4 percent from a high of $1,295.97 early this month. But traders were skeptical that gold had hit bottom. "Momentum certainly seems to be lower for the moment," said
MKS PAMP trader Alex Thorndike in a note. "(But) there does seem to be a little renewed buying interest below $1,250, so we feel a period of consolidation is likely," he added.
• Analysts at Standard Chartered said in a note they expected the Fed to raise rates twice, rather than three times, next year and the gold should rise to $1,300 an ounce by the end of 2017.
• Several Fed officials have said the bank should push ahead with rate rises, but the head of the Chicago Federal Reserve said on Tuesday he was increasingly concerned that soft inflation meant the bank would struggle to get price pressures back to its 2 percent objective.
• Silver <XAG=> was down 0.2 percent at $16.43 an ounce, after falling to a six-week low at $16.33.
Reference: Reuters
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