BLBG:Gold Swings Between Gains And Losses Before ECB Decision
Gold swung between gains and losses in London before the European Central Bank’s rate decision.
The ECB will probably reduce the benchmark rate 25 basis points to a record low of 0.75 percent today, according to the median forecast in a Bloomberg survey of economists, as policy makers battle the region’s debt crisis. The Bank of England may raise its target for bond purchases today, boosting it by 50 billion pounds ($78 billion), another survey shows. Gold denominated in euros and pounds rose to the highest level in more than two weeks.
The ECB decision “could yield both accommodative policies, as well as more dollar strength,” Jason Schenker, president of Prestige Economics LLC, in Austin, Texas, said in a report e- mailed today. Commodity price moves may be “more of a wild card” today, he wrote.
Gold for immediate delivery rose 0.2 percent to $1,618.93 an ounce by 10:45 a.m. in London. It gained to as much as $1,619.40 an ounce and fell as much as 0.1 percent earlier today. August-delivery bullion fell 0.2 percent to $1,619.10 an ounce on the Comex in New York.
The U.S. Dollar Index, a gauge against a six-currency basket that includes the euro, climbed as much as 0.6 percent. Gold usually trades counter to the dollar. Bullion denominated in euros rose as much as 0.4 percent to 1,294.75 euros ($1,619) an ounce, and gold in pounds gained as much as 0.3 percent to 1,039.35 pounds ($1,619), both the highest since June 19.
“Gold could edge higher again if the ECB and BoE announce further easing measures as widely expected,” Credit Suisse Group AG’s private banking unit said in a report today.
The Bank of Japan (8301) will use monetary policy to ensure financial stability, Governor Masaaki Shirakawa said today. Factory orders in Germany, Europe’s biggest economy, probably dropped 6 percent in May from a year earlier, a Bloomberg survey of economists showed before a report today.
Bullion at the morning “fixing,” used by some mining companies to sell output, rose to $1,616.75 an ounce in London from $1,613.50 yesterday afternoon.
Spot silver rose 0.4 percent to $28.25 an ounce. Platinum for immediate delivery gained 0.7 percent to $1,489 an ounce. Palladium advanced 0.7 percent to $599.80 an ounce.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
