Gold held steady on Thursday ahead of European Central Bank's (ECB) policy meeting later in the day, while a stronger dollar pressured the safe-haven metal. Spot gold was flat at $1,425.80 per ounce, as of 0724 GMT. US gold futures were up 0.1% at $1,425.60 an ounce. "Gold prices have been range-bound. Some money managers are starting to shut some positions to prepare for the Federal Reserve meeting, and also the ECB decision coming out today," said Benjamin Lu, an analyst at Phillip Futures.
"People like to take in some profits because nobody knows what is going to happen. Some might capitalise on volatility to push prices slightly lower and buy back after the dip. Overall, on the long-term we are still bullish on gold," Lu added.
Weighing down gold prices, the US dollar was hovering near a two-month high hit in the previous session. A stronger dollar makes gold costlier for holders of other currencies.
Investor focus shifted to the ECB meeting due later in the day and a widely-expected interest rate-cut from the US Fed next week, which are expected to dictate the tempo for currencies and bond yields in coming months.
Gold prices have climbed more than 12% or $150, since touching a 2019 low of $1,265.85 in early May, driven by a dovish outlook from major central banks, signs the US economy is losing steam and an escalation in Middle East tensions.
"The gold rally will be vulnerable to the rhetoric of central banks, as their actions have for the most part been priced into the asset," Alfonso Esparza, a senior market analyst at OANDA, said in a note.
Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.11% to 822.25 tonnes on Wednesday from Tuesday. Spot gold remains neutral in a narrow range of $1,412-$1,427 per ounce, according to Reuters technical analyst Wang Tao.
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