Gold price steady after choppy week’s trading

The gold price was trading sideways on Friday December 9 after a jittery week in which prices swung on currency movements and news headlines.

Spot gold was recently quoted at $1,169.10/1,169.40 per oz, down 0.85% on the previous day’s close. The metal had crashed to a ten-month low of $1,157 per oz in the previous session as confidence returned to the equity markets.

In currencies, the euro was unchanged at 1.0616 against the dollar, while the dollar index was up 0.04% at 101.12.

Yesterday, the European Central Bank (ECB) announced that it will scale back its huge bond-purchasing programme through the end of 2017. The ECB will now buy €60 billion ($64 billion) of euro-denominated bonds per month from next April, down from the current €80 billion per month, and will maintain the programme through the end of 2017.

“Gold prices sold off after the ECB announced it would extend its bond-purchasing programme at a reduced rate, with the initial reaction suggesting gold investors viewed this move as a precursor to the eventual end of quantitative easing. However, prices recovered somewhat after [ECB president Mario] Draghi indicated that tapering was not discussed by the governing council nor was tapering on the horizon,” ANZ Research said.

Attention will now switch to the USA FOMC meeting. The Fed is widely expected to raise rates on December 14, particularly after a run of positive data from the country.

“We suggest investors position for another leg lower in gold prices before the FOMC meeting next week,” Citi Bank said in a note.

The silver price was recently quoted at $17.065/17.095 per oz, while platinum was unchanged at $932/942 per oz. Palladium was up $8 at $740/745 per oz.

(Editing by Rod George)

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