Gold prices gained amid a weaker dollar and a firmer euro on Thursday, with the market expecting the European Central Bank to taper monetary stimulus at a meeting later in the day. The ECB is all but certain to cut back on its bond-buying stimulus, taking its biggest step yet in unwinding years of loose monetary policy.
However, as low inflation remains a primary concern for the bank, any reduction in monthly asset purchases would be expected to come with an extension of the programme. "We suspect that the central bank could come across as somewhat more hawkish than what the market is currently expecting," INTL FCStone analyst Edward Meir said in a note.
"As a result, we could see the euro strengthen post-policy statement, which would be short-term constructive for gold." Spot gold was up 0.3 percent at $1,280.42 an ounce by 0618 GMT. US gold futures for December delivery rose 0.2 percent to $1,281.80 an ounce. Spot gold may edge up to a resistance at $1,283 per ounce, a break above which could lead to a gain to $1,289, Reuters technicals analyst Wang Tao said.
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