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Gold slips as ECB's Draghi lifts the dollar

Reuters  |  LONDON 

By Jan Harvey

LONDON (Reuters) - Gold fell on Thursday as the dollar bounced from a near three-week low against the euro after signalled that any policy normalisation in the euro zone would be very gradual.

The single currency gave up all its early gains against the dollar to turn lower after Draghi said monetary policy would remain "reactive" and that measures of underlying inflation were still subdued.

Spot gold was down 0.3 percent at $1,321.09 an ounce at 1500 GMT. It touched a one-week high of $1,340.42 on Wednesday before closing 0.6 percent lower. U.S. gold futures were down 0.4 percent at $1,321.80.

said the dollar would remain the key of gold prices in the near term. "The only reason we were up near $1,340 was because the dollar fell towards the end of last week," she said.

European and U.S. stocks rose on Thursday as traders took a break from worrying about a global trade war and focused instead on the ECB's plans to end its 2.5 trillion euro stimulus programme.

Markets are awaiting further on plans for U.S. tariffs on some imported goods, announced by last week. The said late on Wednesday that Canada, and possibly other countries may be granted exemptions.

There was some pointed criticism from Draghi for Trump's plans for more trade tariffs. "If you put tariffs against (those) who are your allies, one wonders who the enemies are," he said.

Trump will sign a proclamation establishing the tariffs during a ceremony scheduled for 2030 GMT, a source familiar with the situation said.

"Should tariff concerns remain in focus, gold should once again find its feet," said in a note.

Traders are also awaiting Friday's non-farm payrolls data for February, a key barometer of the U.S. economy, for further clues on the pace of Federal Reserve rate increases.

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar in which it is priced.

was down 0.1 percent at $16.48 an ounce, while platinum was 0.5 percent lower at $947.87 after touching its weakest since Jan. 4 at $943.

The platinum market will be broadly balanced this year as a drop in supply trims last year's surplus to negligible levels, the said on Thursday.

Palladium was down 0.2 percent at $966.72 after dropping to its lowest since Feb. 9 at $961.55 on Wednesday.

(Additional reporting by in Bengaluru; Editing by and Elaine Hardcastle)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 08 2018. 23:26 IST