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PRECIOUS-Gold prices inch lower as markets eye ECB decision

Published 23/01/2020, 08:10 pm
© Reuters.  PRECIOUS-Gold prices inch lower as markets eye ECB decision
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(Updates prices)

* ECB President also set to launch broad review of policy

* WHO to decide on global emergency declaration over China virus

* Spot gold biased to revisit low of $1,545.96/oz - technicals

By Sumita Layek

Jan 23 (Reuters) - Gold prices edged lower on Thursday, consolidating near the $1,550 level, ahead of a policy decision by the European Central Bank, although mounting concerns over a virus outbreak in China limited losses.

The euro zone's central bank will announce its monetary policy decision at 1245 GMT.

Spot gold XAU= was down 0.2% at $1,556.20 per ounce by 0855 GMT. U.S. gold futures GCv1 fell 0.1% to $1,555.90.

With nearly 600 confirmed cases and 17 deaths in China from the new coronavirus, the World Health Organization will decide on Thursday whether to declare a global emergency over the outbreak. looks like the market doesn't really have the impetus it needs to go one way or another, even the coronavirus outbreak did not give gold a meaningful run," said Ilya Spivak, a senior currency strategist at DailyFx.

However, "If there is an (WHO emergency) announcement, the markets might conclude or be concerned that we might have a SARS-like response, where there is significant economic impact and gold might go up on that," he said.

The Severe Acute Respiratory Syndrome (SARS) epidemic in 2002-2003, also a coronavirus outbreak, had started in China and killed nearly 800 people worldwide and hit the global economy. is considered a safe asset in times of political and economic uncertainty.

Traders remained anxious about the spread of the virus as China gears up to celebrate the Lunar New Year from this weekend, a peak period for travel and gold demand in the region.

Under investors' radar is a monetary policy meeting by the European Central Bank, where ECB President Christine Lagarde is also set to launch a broad review of its policy that is likely to see her redefine the central bank's main goal and how to achieve it. interest rates and accommodative monetary policy are the reality, and this favours investment demand for gold ... though, the sector remains vulnerable to brief pullbacks, as investors lock-in profits," ANZ analysts said in a note.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Spot gold is biased to revisit its Jan. 21 low of $1,545.96 per ounce, as it looks shaky around a resistance at $1,564, said Reuters technical analyst Wang Tao. TECH/C

Among other precious metals, palladium XPD= rose 1.1% to $2,499.70 an ounce, silver XAG= fell 0.5% to $17.72 per ounce, while platinum XPT= dipped 0.4% to $1,007.79.

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