RTTN:Gold Extends Gains Ahead Of ECB Rate Decision
(RTTNews) - The price of gold was extending gains Wednesday morning as traders speculate that the G7 countries would coordinate their efforts in tackling the European banking and sovereign crises in the G20 summit, scheduled June 18.
Gold for August delivery, the most actively traded contract, gained $19.70 to $1,636.60 an ounce. Yesterday, gold edged up as investors sought safe haven in the precious metal following reports that the G7 nations failed to make any headway in finding a solution to the euro zone financial crisis and as well on some soft economic data globally.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,273.88 tons.
This morning, the U.S. dollar was leveling off from its two-year high versus the euro and hovering around its five-month high against sterling. The buck continued to recover from its 4-month low versus the yen, while ticking lower against the Swiss franc.
In economic news, the euro zone economy stagnated in the first quarter, revised data from Eurostat showed, confirming that the single-currency bloc has escaped a fall-back into recession. The gross domestic product remained flat compared to the previous quarter after shrinking 0.3 percent in the fourth quarter of 2011. This matched the preliminary estimate.
Meanwhile, Germany's industrial production decreased more than expected in April, according to a report from the Federal Ministry of Economy and Technology. Industrial production fell 2.2 percent in April from a month ago, offsetting March's revised 2.2 percent increase. Economists were expecting a 1 percent fall for April.
The European Central Bank is expected to maintain the main refi rate at 1 percent, in its interest rate announcement due at 7.45 am ET. The central bank had reduced the rate in November and December, reversing the two hikes undertaken earlier last year. The prices of silver and platinum were moving higher in morning deals.
