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PRECIOUS-Gold recovers after hitting 3-week low; ECB in focus

Published 21/07/2016, 05:08 pm
© Reuters.  PRECIOUS-Gold recovers after hitting 3-week low; ECB in focus
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* ECB rate decision due at 1145 GMT

* Palladium hovers below 9-mth high touched on Wednesday (Recasts, updates prices)

By Sethuraman N R and Vijaykumar Vedala

BENGALURU, July 21 (Reuters) - Gold came off a three-week low to trade marginally higher on Thursday as the dollar slipped while investors awaited cues from a European Central Bank policy meeting due later in the day.

Spot gold XAU= was up 0.1 percent at $1,317.40 an ounce by 0644 GMT. Earlier in the session, it touched a low of $1,310.56, its lowest since June 28.

U.S. gold GCcv1 was down 0.1 percent at $1,317.50 an ounce.

The dollar index .DXY , which hit a more than four-month high on Wednesday, slipped 0.3 percent to 96.95.

The European Central Bank is all but certain to keep rates firmly on hold on Thursday, when announcing its rate decision due at 1145 GMT. gold looking increasingly shaky on the charts, all eyes will turn to the ECB policy meeting. Should the central bank signal a more accommodative policy, we could see gold get a bit of a lift despite the fact that the dollar could strengthen as a result," said INTL FCStone analyst Edward Meir.

Asian stocks climbed to nine-month highs on Thursday, helped by a pickup in capital inflows and a recovery in global oil prices. MKTS/GLOB

"Stock markets are moving up which is not good for gold. We expect prices to scale down a little more. I don't think prices will stabilize before next week's U.S. Federal Reserve meeting," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Spot gold has found a support at $1,313 per ounce, and may hover around this level temporarily before falling towards the next support at $1,298, according to Reuters technical analyst Wang Tao. summer trading conditions may be as important a reason for gold edging lower than renewed expectations for a rate rise this year," HSBC analyst James Steel said in a note.

"In quiet conditions the gold market may gravitate to the vicinity of large round numbers, with $1,300/oz the closest and most obvious."

Spot silver XAG= , which fell in the last five sessions, rose 0.1 percent to $19.41 an ounce.

Platinum XPT= , which hit a two-week low on Wednesday, was up 0.5 percent at $1,085.20.

Palladium XPD= , which hit its highest in nearly nine months on Wednesday, was up 0.5 percent at $673.08.

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