MANILA, Jan 22 ― Gold slipped today as the euro fell after the European Central Bank hinted at further policy easing amid turmoil in global markets and weaker growth across emerging economies.
Fading growth and inflation prospects will force the ECB to review its policy stance in March, President Mario Draghi said yesterday, a strong signal that more easing could be coming within months.
Draghi's comments lifted the dollar against the euro and helped battered stocks recover some lost ground, hitting gold which had gained earlier this week from safe-haven demand.
“Gold's past gains have come from uncertainties in the market, but with this move from the ECB it's likely to pressure gold down,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.
Spot gold was off 0.2 per cent at US$1,098.96 (RM4,741.04) an ounce by 0206 GMT. But bullion was still up 0.9 per cent for the week after touching a 1-1/2-week peak of US$1,109.20 on Wednesday.
US gold for February delivery rose 0.1 per cent to US$1,099.50 an ounce.
Gold had benefitted from risk aversion among investors that sank stocks and crude oil, although slow physical demand from major consumers China and India kept a lid on price gains.
Premiums for gold prices in China rose only slightly this week and sellers in India offered discounts amid poor demand.
Ang expects spot gold to drop below US$1,000 towards year-end due to weak physical demand and as investors scour for other safe-havens like the Japanese yen.
“A gold-bull market that relies too heavily on safe-haven related demand may not be sustainable in the long run,” HSBC analyst James Steel wrote to clients.
“This helps explain why we are bullish longer term but only moderately so and rest our longer term expectations for a gold bull market on likely euro-dollar gains, emerging market physical demand and central bank accumulation rather than relatively short-lived safe-haven or geopolitically inspired demand.”
Spot platinum was steady at US$816.74 an ounce after further selling dragged the metal to a fresh seven-year low of US$806.31 yesterday.
Palladium rose 0.4 per cent to US$499.10 an ounce and silver was flat at US$14.06. ― Reuters
