Gold hovers near 1-week low as risk appetite improves; focus on ECB meet
- US gold futures eased 0.2% to $1,799.20 per ounce
Gold prices fell on Thursday, hovering near a more than one-week low, weighed down by a stronger dollar and a rebound in risk sentiment, while investors awaited the European Central Bank policy meeting later in the day.
Spot gold was down 0.2% at $1,799.18 per ounce, as of 0514 GMT, after hitting its lowest since July 12 at $1,793.59 in the previous session.
US gold futures eased 0.2% to $1,799.20 per ounce.
"Gold prices are under pressure because the dollar is now hovering around highest in three months and Wall Street rebounded for the second day, meaning that traders are shrugging off virus concerns and are back to reflation trade," said Margaret Yang, a strategist at DailyFX.
Asian stocks rallied on Thursday on the back of overnight gains in Wall Street, as investors largely overlooked apprehension about the Delta coronavirus variant and inflation.
The dollar index held steady, hovering below a 3-1/2-month peak ahead of the ECB policy decision due at 1145 GMT.
The European Central Bank (ECB) policymakers will implement for the first time changes to their strategy and are all but certain to promise an even longer period of stimulus to make good on the commitment to boost inflation.
"ECB is widely expected to remain dovish, so this may lead euro to weaken against the dollar causing the greenback to rise, which will be negative for gold. For now, gold's near-term momentum seems tilted to the downside," Yang said.
Meanwhile, benchmark US Treasury yields continued their bounce from five-month lows following a weak 20-year bond auction.
Spot gold may break a support at $1,795 per ounce and fall towards $1,785, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver edged 0.3% lower to $25.15 per ounce, palladium rose 0.5% to $2,667.44, and platinum fell 0.3% to $1,076.91.
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