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Market: Gold price increases

Gold prices edged up on Wednesday, snapping a four-day losing streak on technical buying, amid expectations that the European Central Bank (ECB) will dole out stimulus and cut interest rates.

Spot gold was up 0.5 per cent at $1,493.50 per ounce, as of 0611 GMT.

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In the previous session, prices fell to their lowest since Aug. 13 at $1,483.90.

U.S. gold futures were up 0.2 per cent at $1,502.2 an ounce.

“The ECB is expected to reduce further the interest rate into negative territory.

“The meeting could serve as a potential catalyst (for gold) and investors are already buying into the rate cut expectations,’’ said Margaret Yang Yan, a market analyst at CMC Markets.

Given that gold has had such a deep correction from its recent peak, investors are buying on dips, Yan added.

Bullion prices have shed more than four per cent or over $60, since scaling an over six-year peak of $1,557 on Sept. 4.

Risk sentiment got a lift ahead of monetary policy decisions by the ECB on Thursday and the U.S. Federal Reserve next week, with investors hoping for further easing amid a slowdown in global growth.

Market participants might be reluctant to commit to big risk-on bets, which could nudge gold upwards amid pre-positioning ahead of Thursday’s event, said Ilya Spivak, Senior Currency Strategist at DailyFx.

ECB policymakers are leaning toward a package that includes a rate cut, a pledge to keep rates low for longer and compensation for banks over the side-effects of negative rates, five sources familiar with the discussion said last week.

Fundamental backdrop is still broadly gold-supportive, considering the main sources of risk aversion remain unresolved, Spivak added.

“Both Brexit and the U.S.-China trade war are ongoing concerns, as is the broader slowdown in global growth … that probably encourages central banks to remain dovish.’’

Gold prices gained about 18 per cent, or over $200, since hitting year’s low of $1,265.85 on May 2.

On the trade front, a senior White House adviser tamped down expectations on Tuesday for the next rounds of U.S.-China trade talks, urging investors, businesses and the public to be patient about resolving the trade dispute.

Spot gold still targets $1,453 as it has cleared a support at $1,497 per ounce, according to Reuters’ Technical Analyst, Wang Tao.

Meanwhile, the dollar index was steady, while Asian stock markets held firm and bond yields rose on Wednesday.

Among other precious metals, silver gained 1.1 per cent to $18.21 per ounce, having hit a two-week low of $17.75 in the previous session.

Palladium was up 0.3 per cent at $1,566.28 per ounce, while platinum climbed 1.2 per cent to $941.35. (Reuters/NAN)

OVER 5,000 NIGERIAN MEN HAVE OVERCOME POOR BEDROOM PERFORMANCE SYNDROME DUE TO THIS BRILLIANT DISCOVERY

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