Gold steadied overnight just above a five-week low touched a day earlier as the US dollar retreated slightly and stocks edged lower, with investors awaiting further signals on the health of the global economy.
Spot gold was little changed at $US1,286.01 per ounce, trading in a narrow $US7 range.
US gold futures settled up 0.2 per cent at $US1,287.6 per ounce.
‘After the massive sell-off it is not surprising to see the prices stabilise given the cautious tone on the equity market, especially today,’ Commerzbank analyst Eugen Weinberg said.
‘The risks (to the market) are not out, they are only delayed.’
US stocks fell on Wednesday as investors stayed on the sidelines following a strong rally this year, while the US dollar index held steady.
Gold hit a low of $US1,280.70 on Tuesday, its weakest level since January 25, with prices down more than 4 per cent since hitting a 10-month peak on February 20.
‘Gold has found a bid and is starting to stabilise while we are waiting for the ECB pronouncement tomorrow,’ said George Gero, managing director at RBC Wealth Management.
Weak data from the euro zone the last couple of weeks has fuelled expectations that the European Central Bank at its Thursday meeting could downgrade the area’s growth and inflation forecasts for 2019 and hold off raising interest rates.
Meanwhile, the Organisation for Economic Cooperation and Development cut forecasts again for the global economy in 2019 and 2020, citing trade rows and Brexit uncertainty.
Investors are awaiting US monthly jobs data to be disclosed on Friday, which is considered a key indicator of the health of the world’s largest economy.
‘The market is impatiently awaiting the release of the jobs numbers, for which the yellow metal could have an asymmetric reaction to the upside on any disappointment,’ Bart Melek, head of commodity strategies at TD Securities in Toronto, said in a note.
Among other precious metals, palladium rose 0.9 per cent to $US1,529.51 per ounce.
Spot silver declined 0.3 per cent to $US15.07 per ounce, after hitting its lowest level since December 27, at $US15, earlier in the session.
Platinum dipped 1.6 per cent to $US823.
The largest surplus since at least 2013 is projected for the global platinum market this year, the World Platinum Investment Council said, forecasting an oversupply of 680,000 ounces in 2019 after a surplus of 645,000 ounces last year.