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Gold steadies ahead of ECB meeting

Reuters  |  LONDON 

By Jan Harvey

LONDON (Reuters) - Gold steadied on Thursday as uncertainty ahead of a policy meeting and further on U.S. trade tariffs kept the in a narrow range, though a stronger dollar pressured prices.

The dollar firmed after the indicated that key trading partners could be exempt from the and aluminium import tariffs it proposed last week. [FRX/]

Spot gold was at $1,325.69 an ounce by 1025 GMT, little changed from late on Wednesday, when it rose to a one-week high of $1,340.42 before closing 0.6 percent lower. U.S. gold futures were down 0.1 percent at $1,326.40.

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.

"We have the ECB meeting today, which is more of a euro story. If speculators finally start taking profit on the euro long position, that could reflect in a higher dollar."

The ECB is expected to keep policy unchanged on Thursday but could tweak its accompanying statement to offer some clues about plans to end its unprecedented bond purchases this year.

Friday's non-farm payrolls data for February, a key barometer of the U.S. economy, is also being awaited 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.

In the medium term gold will come under temporary pressure from interest rate hikes, said Peter Fung, of dealing at Wing Fung Precious Metals in Hong Kong.

Gold traders are also awaiting further on plans for U.S. tariffs on some imported goods. The said late on Wednesday that Canada, and possibly other countries may be granted exemptions, at least for a while.

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

Silver was down 0.2 percent at $16.47 an ounce, while platinum fell 0.4 percent to $948.70 after touching its lowest since Jan. 4 at $943.

Palladium was down 0.1 percent at $968.50 after dropping to its lowest since Feb. 9 at $961.55 on Wednesday.

(Additional reporting by in Bengaluru; Editing by David Goodman)

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

First Published: Thu, March 08 2018. 16:14 IST