SINGAPORE: Gold was little changed on Wednesday, after advancing for three straight days on hopes that central banks in Europe and the United States will launch more stimulus measures to help shore up their faltering economies.
The euro zone debt crisis, now in its third year, is increasingly threatening the economies in the bloc, and might push the European Central Bank to launch a new round of its bond-buying programme soon, buoying gold's appeal as an inflation hedge.
In the latest indicator of Europe's troubles, ratings agency Standard & Poor's revised Greece's outlook to negative, saying the debt-ridden euro zone country could need more help from its international creditors.
Boston Fed Bank President Eric Rosengren said the central bank should launch another bond buying programme of whatever size and duration was necessary to get the US economy back on its feet. Rosengren is not a voter on the policy-setting panel and is considered among the most outspoken "doves".
"Gold is still looking promising in the second half, with peak physical consumption season on the horizon and more quantitative easing from the US Fed still in the cards," said Li Ning, an analyst at Shanghai CIFCO Futures.
She added that the technical picture for gold also looked supportive as the lows on the weekly chart had been gradually moving up since July.
Spot gold was little changed at $1,610.31 per ounce by 0316 GMT, after rising more than 1 percent over the past three sessions.
The US gold futures contract for December delivery also traded nearly flat at $1,613.10.
TRADING INTEREST EBBS
Although the prospect of further monetary stimulus measures has underpinned sentiment in gold, the recent sideways pattern of price moves has done little to encourage investor interest in the shiny metal.
The trading volume on the popular gold spot deferred contract on the Shanghai Gold Exchange stood at 11,468 contracts on Tuesday, after double-counting, down nearly 30 percent from July's average daily volume.
In August 2011, daily trading volume was 35,086 contracts.
Spot silver eased to $27.99 per ounce, after rising to a one-week high of $28.23 on Tuesday, but traders said the metal was still struggling to break a range that has held for more than a month.
"We would be able to talk about a break from the sideways trend if it stands steady above $28.5," said a Shanghai-based trader.
Comments
Comments are closed.