By Myra P. Saefong and William L. Watts, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures edged higher Wednesday, finding support from weakness in U.S. equities as investors looked ahead the European Central Bank’s policy meeting this week.
Gold for April delivery GCJ3 +0.17% rose $3, or 0.2%, to $1,676.50 an ounce on the Comex division of the New York Mercantile Exchange.
Gold’s moving higher “ahead of ECB monthly meeting on Thursday and press conference with [the central bank’s President Mario] Draghi, which could show further color on ECB policy going forward,” said Jeffrey Wright, a managing director at Global Hunter Securities.
The ECB is widely expected to leave its key lending rate unchanged at a record low 0.75% when the Governing Council concludes its policy meeting Thursday. See: Draghi unlikely to take up arms in currency war.
Draghi’s news conference will also be closely watched for any reaction to the sharp fall in the Japanese yen USDJPY -0.0108% , which has prompted complaints from some European leaders.
Draghi last month showed little sign of concern over the yen’s fall.
On Wednesday, the yen strengthened against the U.S. dollar, but the ICE dollar index DXY +0.29% still saw a modest gain of 0.3% as the euro EURUSD -0.42% weakened against the greenback. Read more on currencies.
The gold market, meanwhile was also looking to news out of China showing that the country, as a whole, “has taken up the slack in physical demand for gold, where India has fallen short based on their import tariff,” said Wright.
In a note Wednesday, analysts at Commerzbank said China imported record quantities of gold from Hong Kong in December, with year-on-year imports up to 114.4 metric tons.
“If it is assumed that China itself produced almost 400 tons of gold last year, the total Chinese gold demand will have been over 950 tons,” the analysts said. That “would mean that China had overtaken India as the world’s number one consumer of gold on a yearly basis. Owing among other things to higher duties on gold imports, Indian gold demand is likely to have fallen last year to just over 700 tons.”
Gold futures prices had lost $2.90, or 0.2%, on Tuesday following a rally in U.S. equities.
Investors “remain unconvinced gold is capable of replicating its decade-long robust performance through to 2012 given recent improvement to global risk sentiment and rallying equity markets,” said Andrey Kryuchenkov, strategist at VTB Capital in London.
“For now, we expect gold to continue consolidating in the current short-term range” ahead of the European Central Bank and Bank of England monetary-policy statements on Thursday, Kryuchenkov said.
Silver futures were under pressure after a 0.5% gain in the previous session. March silver SIH3 -0.46% was down 14 cents, or 0.4%, at $31.74 an ounce.
April platinum PLJ3 +0.26% jumped $23.40 an ounce, or 1.4%, to $1,731.10, while March palladium PAH3 +0.10% gained 60 cents, or 0.1%, to $766.05 an ounce.
High-grade-copper futures for March delivery HGH3 -0.66% slipped 3 cents, or 0.9%, to $3.74 a pound.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.
