By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch)—Gold prices pushed higher as investors grew cautious ahead of the outcome of a rate-call meeting from the European Central Bank, and with an important season for Indian gold buying just around the corner.
Gold for December delivery GCZ2 +0.53% climbed $9.80, or 0.6%, to $1,789.50 an ounce in electronic trading in Europe. On Wednesday, gold gained $4.20 to settle at $1,779.80.
However, bold measures from the ECB aren’t in the cards for Thursday, according to economists, with the central bank expected to hold steady on record-low interest rates.
Any change in policy will be announced at 1:45 p.m. local time, or 7:45 a.m. Eastern time, with a news conference by ECB President Mario Draghi to follow at 8:30 a.m. Eastern. Read: ECB chief Mario Draghi's hands are tied.
The Bank of England held steady on interest rates and asset purchases on Thursday. See: Bank of England stands pat; ECB up next.
That hasn’t stopped some investors from moving into gold just in case, said Austin Kiddle, director, Sharps Pixley, in emailed comments.
“There are a lot of people out there talking of financial Armageddon and even with seemingly neutral announcements, this can make investors prepare for the worst,” Kiddle said.
Monetary-policy easing over the past few months has acted as a support for gold as investors view it as the ultimate store of value. Gold strengthens when investors fear inflation and currency weakening.
“$1,780 was an important number to breach and with the U.S. dollar rising due to recent positive data, it has given gold a strong headwind instead of the normal inverse-relationship that gold and the dollar normally have,” said Kiddle. “We shall be watching the upcoming U.S. data closely to see if this holds true.”
Key U.S. nonfarm-payrolls data for Friday will be the economic highlight of the week for gold, equities and other assets. The metal wobbled after a positive U.S. services report a day prior.
Thursday’s U.S. data include weekly jobless payments and factory orders data.
The ICE dollar index DXY -0.16% , which measures the greenback against a basket of six other major currencies, fell to 79.790 from 79.956 in North American trade late Wednesday. Read: Dollar gains against Japanese yen
Also supportive for gold, said Kiddle, is the fact that the Hindu festival of Diwali is fast approaching. What marks a key time for precious metals buying in India could help push gold to the key level of $1,800 an ounce, he said.
Other metals followed gold higher. December silver futures SIZ2 +0.78% jumped 29 cents, or 0.8%, to $34.98 an ounce, while December copper HGZ2 +0.40% gained 1 cent, or 0.4%, to $3.80 a pound.
December palladium PAZ2 +0.93% rose $6.65, or 1%, to $664.55 an ounce, and January platinum futures PLF3 +0.55% added $10.80, or 0.6%, to $1,704.90 an ounce.
Mining strikes have been supportive for metals such as platinum. In South Africa, nearly 20% of the nation’s miners are striking, which is affecting some of the biggest gold and platinum mining companies in that country. Striking spread to the iron-ore sector on Wednesday.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.
