Gold futures traded near a four-month high on Monday, before ECB policy makers meet to discuss introducing new stimulus on Thursday’s meeting, amid speculation it will launch a government bond-buying program.
And some uncertainty on global markets pushed investors to the metal as a safe haven, with interests in the top bullion fund recording their biggest jump in nearly five years.
On the Comex New York, gold February futures dropped $1.30, or 0.1%, to trade at $1,275.60 a troy ounce.
Spot Gold rose and fell at least 0.2 percent, and traded 0.4 percent lower at $1,275.09 an ounce in Singapore.
On Friday, gold hit $1,282.40, the most since September 2. And holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, climbed 1.92 per cent to 730.89 tonnes.
The liquidity was set to be thin on Monday with US markets closed for a holiday.
However trading volatility will likely increase through the week with key data and central bank policy meets the schedule.
The most expected will be the policy meeting of the European Central Bank, January 22, when investors believe that it will launch a program to buy government bonds on a large scale.
The euro was close to recent lows against the USD and yen on Monday as investors waited to see if the European Central Bank would embark on a program of quantitative easing up on Thursday.
Market participants looked forward to a set of Chinese economic data due on Tuesday for more indication of the economic strength and the future trajectory of monetary policy.
The Asian country will release data on fourth quarter gross inner product, as well as reports industrial production activities, retail sales and fixed assets investment for December.
By taking positive cues from the global market, gold prices rose at the Multi Commodity Exchange in futures trade today as speculators enlarged positions. On MCX, gold for delivery in far-month April contracts was up by Rs 101, or 0.36%, to Rs 27,818 per 10 grams.
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