ET:Gold steady; heightened hopes of ECB action support
SINGAPORE: Gold traded steady on Friday, holding on to gains in the previous session from its biggest daily rise in two weeks on German Chancellor Angela Merkel's support for more action by the European Central Bank to contain the bloc's debt crisis.
Investors have been waiting for bold moves by the ECB after President Mario Draghi said last month the bank would do everything in its power to hold the euro zone together, although a subsequent ECB meeting yielded little concrete.
Merkel's support for Draghi injected confidence into the market that European leaders may eventually come up with a solution to the crisis, now in its third year, and spurred investors to riskier assets.
Gold's fate largely hinges on central bank attitudes towards further monetary easing, especially as physical demand slumped globally, led by top consumers India and China.
"The market is still moving on changing expectations of central bank actions, and is so far unwilling to push prices out of the $1,590 to $1,630 range," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
The seesawing pattern is likely to extend to at least the end of August, when comments by U.S. Federal Reserve Chairman Ben Bernanke at the Fed symposium at Jackson Hole, Wyoming may shed light on the central bank's next easing move, he added.
Spot gold inched up 0.2 percent to $1,616.44 an ounce by 0621 GMT, on course for a weekly loss of 0.2 percent, despite posting in the previous session its biggest one-day gain in two weeks, at 0.7 percent.
The U.S. gold futures contract for December delivery was little changed at $1,619.
Recent U.S. data continued to show a mixed picture of the economy. A trend measure of Americans signing up for new jobless benefits fell close to a four-year low last week, but weakness in a regional factory gauge showed the U.S. recovery still faces an uphill climb.
GOLD-PLATINUM PREMIUM SHRINKS
Gold's premium to platinum fell to below $172 an ounce, its lowest in nearly a month, after platinum prices jumped on the bloodshed in Lonmin's Marikana platinum mine in South Africa.
Spot platinum hit $1,447, its highest since July 7, after rising more than 3 percent in the previous session. The metal, mainly used to produce jewellery and autocatalysts, was headed for a weekly rise of 3 percent, the most in two months.
In industry news, Barrick Gold Corp, the world's top gold miner, is in talks to sell all or part of its stake in its African arm to China Gold Group Corp, China's top gold producer.
