13 Mar 2013

Gold trades slightly higher on ECB rumors


Gold futures rose are trading modestly higher in the early part of Wednesday’s Asian session as traders speculate the European Central Bank might have room to engage in monetary easing.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 0.04% to USD1,592.30 per troy ounce in Asian trading Wednesday after gaining 0.86% to settle at USD1,591.60 a troy ounce in U.S. trading on Tuesday.

Gold futures were likely to test support USD1,574.60 a troy ounce, Monday's low, and resistance at USD1,1619.40, the high from February 26.

On Tuesday, ECB council member Jens Weidmann said inflationary pressures across the euro zone remain light. Those comments prompted traders to speculate the ECB has some room to weaken the euro through monetary easing. At the conclusion of its policy meeting last week, the ECB left interest rates unchanged at 0.75% while announcing no new monetary easing initiatives.

Due in part to a plummeting Japanese yen, some European policymakers are pressuring the ECB to taken action to weaken the euro. Among the most vocal critics of the weaker yen have been Germany and France, the euro zone’s two largest economies.

Still, there are signs gold investors remain pensive. Holdings of bullion at the SPDR Gold Shares, the world’s largest exchange traded fund backed by by physical gold, resided at 1,236.729 tons as of Monday, the lowest level since late 2011.

On the other hand, physical demand in Asia is seen as steady, helped by comments made by Bank of Japan deputy governor nominee Kikuo Iwata. On Tuesday, Iwata said the central bank should engage in further aggressive easing initiatives.

Elsewhere, Comex silver for May delivery rose 0.05% to USD29.185 per ounce while copper for May delivery added 0.11% to USD3.555 per ounce.
COURTESY : INVESTING.COM

0 Your Opinion:

Post a Comment