Spot gold is up a tad in Europe Thursday, holding its ground above $1,700 a troy ounce after dovish comments by the U.S. Federal Reserve sparked a sharp rally the previous session. Spot gold was 0.2% higher at $1,712.80/oz, just short of the one-and-a-half-month high at $1,714.64/oz it hit earlier in the session. The metal gained 2.7% Wednesday after the Federal Reserve said it would likely keep interest rates low until at least late 2014, a boon for non-interest bearing gold. Gold’s technical are now much improved, and the metal has seen off a recent downward trendline drawn off September’s all-time high, said UBS analyst Edel Tully. Gold’s close above its 100-day moving average at $1,685/oz is also a bullish technical development. Spot gold hit a record high at $1,920.94/oz Sept. 6. Physical demand for gold is expected to be quiet Thursday, as China remains away from the markets for the Lunar New Year and India celebrates Republic Day. A lack of physical activity could see gold consolidate around current levels.
EasyForexNews Research Team