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PRECIOUS-Gold up after 3-day drop; dollar slips before ECB meet
October 20, 2015 / 9:34 PM / 2 years ago

PRECIOUS-Gold up after 3-day drop; dollar slips before ECB meet

(Rewrites; adds NEW YORK to dateline, analyst comments)

By Barani Krishnan and Jan Harvey

NEW YORK/LONDON, Oct 20 (Reuters) - Gold rose on Tuesday for the first time in four sessions as the dollar slipped after solid European lending data boosted the euro ahead of a central bank meeting that could add to the European single currency’s appeal.

Technical buying also buoyed bullion in New York trade as it settled above the $1,170-an-ounce support it initially strayed under.

“The bears ... will now want to first and foremost see a decisive break below the $1,170,” Fawad Razaqzada, technical analyst at, wrote in a market commentary.

But while gold was making upward progress, “bulls will need to step up their game in order to push it through some strong resistance areas that are either approaching or being tested,” Razaqzada said, citing the recent 3-1/2 month high above $1,190.

Spot gold was up 0.5 percent at $1,176.41 an ounce at 5:13 p.m. EDT (2113 GMT).

The front-month contract in U.S. gold futures, December, settled up $4.70 an ounce at $1,177.50.

Quarterly lending data from the European Central Bank showed euro zone banks loosened their lending standards more than expected over the last few months despite recent global market volatility. That lessened the need for the ECB to ramp up its 1 trillion euro asset purchase program when it meets on Thursday.

The data added credibility to remarks from ECB Governing Council member Christian Noyer late on Monday that no adjustment was needed in the bank’s quantitative easing programme. The ECB started buying 60 billion euros ($68 billion) of assets a month in March in an attempt to stave off deflation.

Gold was also supported on Tuesday by expectations that the Federal Reserve will push the first U.S. interest rate rise in nearly a decade back to next year. An increase would raise the opportunity cost of holding non-yielding gold.

Investor appetite for gold also appeared to be rising. The world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported a 3.6-tonne climb in its holdings.

Swiss gold exports to China and Hong Kong combined last month was at their highest in more than a year and a half.

Still, delegates to the London Bullion Market Association’s annual gathering in Vienna predicted a price drop to $1,159.88 by October next year.

Silver was up 0.4 percent at $15.89 an ounce. Platinum was up 0.6 percent at $1,015.24 an ounce and palladium was up 1.3 percent at $691.50. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Dale Hudson, David Evans and Bill Rigby)

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