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Gold, silver tread water ahead of ECB rate decision, jobless claims

Published 01/09/2014, 05:16 AM
Gold, silver little changed ahead of ECB, jobless claims
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Investing.com - Gold and silver prices held steady in rangebound trade on Thursday, as investors looked ahead to the European Central Bank’s first policy statement of the year, scheduled later in the day, as well as weekly jobless claims data in the U.S.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,225.80 a troy ounce during European morning trade, up 0.02%. Gold prices held in a tight range between USD1,223.50 a troy ounce and USD1,227.40 a troy ounce.

The February contract settled 0.33% lower on Wednesday to end at USD1,225.50 a troy ounce. Futures were likely to find support at USD1,212.60 a troy ounce, the low from January 6 and resistance at USD1,244.70, the high from January 7.

Meanwhile, silver for March delivery inched down 0.03% to trade at USD19.53 a troy ounce. Comex silver prices traded in a range between USD19.43 a troy ounce and USD19.69 a troy ounce.

The March contract ended Wednesday’s session down 1.25% at USD19.53 a troy ounce. Futures were likely to find support at USD19.31 a troy ounce, the low from January 8 and resistance at USD19.86, the high from January 8.

The ECB is to announce its benchmark interest rate later in the day. The announcement is to be followed by a press conference with President Mario Draghi.

Data released earlier in the week showed that the annual rate of inflation in the euro zone slowed to 0.8% in December from 0.9% the previous month, fuelling concerns over the threat of deflation.

Meanwhile, market players looked ahead to weekly data on U.S. jobless claims, a key indicator ahead of Friday’s nonfarm payrolls report, for indications on the possible timing of further reductions in the Federal Reserve’s stimulus program.

Wednesday’s minutes of the central bank’s December meeting showed that the Fed board cited a stronger labor market in its decision to cut its asset purchase program by USD10 billion to USD75 billion-a-month.

The minutes also showed that officials were keen to stress that further reductions were not on a “preset course” and would be undertaken in “measured” steps.

Some market participants believe the central bank will taper its bond purchases by USD10 billion in each of its next seven meetings before ending the program in December 2014, amid indications of an improving U.S. economy. The Fed is scheduled to meet January 28-29 to review the economy and assess policy.

Elsewhere on the Comex, copper futures for March delivery shed 0.95% to trade at a two-week low of USD3.311 a pound. Data released earlier showed that consumer price inflation in China slowed to a seven-month low of 2.5% in December from 3% in November.

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