Investing.com - Gold futures fell close to a one-week low in European trade on Thursday, as the dollar strengthened against the euro amid expectations the European Central Bank will unveil fresh stimulus measures at the conclusion of its policy meeting later in the day.
The euro fell to 1.0963 against the greenback after climbing to 1.1034 on Wednesday as the ECB is widely expected to cut rates further into negative territory at the conclusion of its monetary policy review on Thursday.
The bank is also expected to enlarge its asset purchasing program in a bid to combat persistently low levels of inflation in the euro area.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% to 97.43 during European morning hours.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Gold for April delivery on the Comex division of the New York Mercantile Exchange shed $10.80, or 0.86%, to trade at $1,246.60 a troy ounce by 08:05GMT, or 3:05AM ET, after falling to a session low of $1,245.70.
A day earlier, gold shed $5.50, or 0.44%, as the metal’s safe-haven appeal was dented amid a recovery in oil prices and global equity markets.
Prices of the yellow metal have been well-supported in recent weeks amid growing speculation the Federal Reserve will not raise interest rates as soon as next week's policy meeting.
Gold hit a 13-month high of $1,280.70 last Friday, after U.S. employment data showed strong jobs growth combined with low wages, prompting investors to scale back expectations on how fast and how far the Fed might raise rates this year.
For the year, gold is up nearly 17% as investors seek safe havens in the face of mounting instability in other financial markets.
Also on the Comex, silver futures for March delivery dipped 13.9 cents, or 0.9%, to trade at $15.24 a troy ounce during morning hours in London.
Elsewhere in metals trading, copper futures eased down 0.5 cents, or 0.22%, to $2.229 a pound, as investors digested another round of Chinese economic data.
The National Bureau of Statistics reported earlier that China’s consumer price index rose to a six-month high of 2.3% in February from a year earlier, above forecasts for an increase of 1.9% after a 1.8% rise in January.
The producer price index fell 4.9% on a year-over-year basis, compared to a decline of 5.3% in January, the agency said.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.