Gold continued to gain in Europe on Thursday, paying little heed to European Central Bank (ECB) sales and remarks by the International Monetary Fund and US government on possible selling of IMF gold. "News that the ECB had sold 47 tonnes of gold and (earlier) poor European economic data have failed to curb interest in gold and silver, with fund interest in silver dragging both metals higher," James Moore of TheBullionDesk.com said.
Traders said a dollar downturn after the release of US inflation data for February was more influential. The 0.2 percent rise in the PCE (personal consumption expenditures) price index was in line with expectations, muzzling dollar bulls looking for clues that US rates would rise aggressively.
The euro cleared the $1.30 level at one point in mid-afternoon, having stood around $1.2912 earlier. On Monday, the euro was at a six-week low of $1.2853. European economic data showed German unemployment rising to a post-war record high, while European business confidence fell to its lowest since December 2003.
Spot gold firmed to $427.90/428.60 per troy ounce by 1500 GMT from $426.60/$427.30 late in New York on Wednesday.
"Above $428, resistance is seen at $430/432...support remains at $422/24 and at the 200-day MA at $419.10, with strong physical support cushioning the metal," Moore said.
The ECB said it had sold 47 tonnes of gold, marking the first time it has sold the precious metal from its reserves.
In a statement, the ECB, which was among the world's top 10 holders of gold, said it completed its programme of sales in full conformity with the Central Banks' Gold Agreement and plans no further sales in coming months.
However, Barclays Capital analyst Kamal Naqvi said this could imply more sales further forward.
"The ECB, although signatories to both gold sale agreements, was never considered a likely seller of gold reserves and the wording of the news release infers that while its sales programme for this year is completed, further sales are planned in the next agreement year," he said.
IMF sales were also being mooted on Thursday. IMF Managing Director Rodrigo Rato said in a newspaper report that if member countries wanted to use the fund's massively undervalued gold reserves for debt relief they should do so by selling the metal, not by revaluing its book rate.
But the United States, which wields influential voting rights in the IMF, said there was no need for the Fund to sell bullion.
Analyst Frederic Panizzutti of MKS Finance said: "I doubt that sales will happen - at least over the short or medium term. The US government is opposed to it and that will make it very difficult."
The global lender's gold stocks of 103.4 million ounces are worth some $42.3 billion at today's market prices. But under a 1971 agreement, most IMF gold is valued at between $40 and just over $50 an ounce, a fraction of the current price.
Silver moved to its highest in 10 days on investor buying. It was at $7.17/7.20 from $7.11/7.14. Platinum was at $866.00/869.00 from $860.00/865.00, while palladium was at $200.00/203.00 from $194.00/199.00.
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