SINGAPORE (Reuters) - Gold rose for a second session on Thursday after China moved to cut banks’ reserve requirement, following other central banks in the world trying to spur growth and fight deflation.
Spot gold was up 0.2 percent at $1,271.96 an ounce by 0026 GMT, adding to a 0.8 percent gain on Wednesday.
Gold has historically benefited during periods of easier global monetary policies amid increased liquidity and low interest rates.
U.S. gold for April delivery rose 0.6 percent to $1,272.50 an ounce.
China’s central bank made a system-wide cut to banks’ reserve requirement, the first time it has done so in over two years, to unleash a fresh flood of liquidity to fight off economic slowdown and looming deflation.
Investors were also keeping an eye on Greece after the European Central Bank said it will no longer accept Greek bonds as collateral for its liquidity operations, dealing a blow to Athens which is seeking debt relief from euro zone lenders.
Cleveland Federal Reserve President Loretta Mester said only a broad decline in U.S. inflation measures and slower economic growth would prompt to back off her recommendation for an interest rate hike in the first half of the year.
U.S. private employers added 213,000 jobs in January, falling short of forecasts for a gain of 225,000 jobs. The figures come ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday.
Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose to 24.69 million ounces on Wednesday, the highest since October.
The euro remained weak after the ECB surprised markets late on Wednesday by announcing it would reimpose minimum credit rating requirements for Greek bonds, effectively shifting the burden on to the Greek central bank to finance its lenders.
Reporting by Manolo Serapio Jr.; Editing by Ed Davies