Gold eased slightly early on Thursday after three days of gains as the US dollar rose and the European Central Bank left interest rates unchanged, maintaining the parameters of its 1.74 trillion euro ($1.95 trillion) asset buying scheme. The ECB has provided extraordinary stimulus in recent years, cutting interest rates into negative territory and pushing the cost of credit to all-time lows.
Spot gold was down 0.2 percent at $1,266.4 an ounce by 2:46 pm EDT (1846 GMT), after tapping a two-week high at $1,273.82. US December gold futures settled down 0.2 percent at $1,267.50. Gold saw good buying at the time of the ECB release, Mitsubishi analyst Jonathan Butler said. "(The) ECB will continue to have a very accommodative policy at least until December," he said.
Ultra-low rates tend to support gold, though that is often offset by the impact of a weaker euro. The single currency fell to a four-month low against the dollar on Thursday. The dollar index rose to a seven-month high against a basket of currencies, extending gains after a stronger-than-expected US existing home sales report.
"Sales rose to 5.47 (million) during the month, that's 3.2 percent higher than a month ago and in contrast to the most recent reading on pending home sales," said Royce Mendes, director and senior economist at CIBC Capital Markets in Toronto.
Traders are closely watching US data for clues about when the US Federal Reserve will raise interest rates, heavily tipped by a number of Fed policymakers for December. The market also eyed Wednesday night's final US presidential debate, which was judged not to have improved Donald Trump's election hopes and which could potentially weigh on gold.
Meanwhile, India's overseas purchases of gold likely hit a nine-month high in October, industry officials told Reuters, while Swiss gold exports to China hit their highest since January last month, Swiss customs data showed. Spot palladium pared losses and was down 0.9 percent at $630 an ounce, after falling to a three-month low at $624.05. Silver was down 0.85 percent at $17.49, while platinum was down 1.06 percent at $933.
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