Picture: REUTERS
Picture: REUTERS

Bengaluru — Gold prices edged higher on Wednesday, snapping a four-day losing streak on technical buying, while investors awaited European Central Bank’s (ECB) meeting where it is widely expected to cut interest rates.

Spot gold was up 0.3% at $1,490.09/oz, as of 4.14am GMT. In the previous session, prices fell to their lowest since August 13 at $1,483.90.

US gold futures were little changed at $1,498.8/oz.

“The ECB is expected to reduce further the interest rate into negative territory ... The meeting could serve as a potential catalyst [for gold] and investors are already buying into the rate cut expectations,” said Margaret Yang Yan, a market analyst at CMC Markets.

Given that gold has had such a deep correction from its recent peak, investors are buying on dips, Yan added.

Bullion prices have shed more than 4%, or over $60, in less than a week, mainly hurt by a broad uptick in risk appetite.

ECB policymakers are leaning towards a package that includes a rate cut, a pledge to keep rates low for longer and compensation for banks over the side-effects of negative rates, five sources familiar with the discussion said last week.

The US Federal Reserve is also widely expected deliver an interest-rate cut next week.

“The big picture is global central banks are willing to lower interest rates and even carry out more quantitative easing to spur growth ... In the mid- to long-term view, lower interest rate environment is bullish for gold price,” Yan said.

Gold prices are up about 18%, or more than $200, since hitting a year’s low of $1,265.85 in May, supported by monetary easing by major central banks, the prolonged US-China trade spat and fears of a global economic slowdown.

On the trade front, a senior White House adviser tamped down the expectation on Tuesday for the next rounds of US-China trade talks, urging investors, businesses and the public to be patient about resolving the trade dispute.

Spot gold still targets $1,453, as it has cleared a support level at $1,497/oz, according to Reuters technical analyst Wang Tao.

Meanwhile, the dollar index was steady, while Asian stock markets held firm and bond yields rose on Wednesday.

Among other precious metals, silver rose 0.5% to $18.10/oz. Palladium was flat at $1,561.14/oz, while platinum gained 0.6% to $936.05.

Reuters