Gold inches up, off 1-month low; ECB meet eyed

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Gold edged up on Thursday, pulling away from a one-month low hit in the previous session. (Reuters) Gold edged up on Thursday, pulling away from a one-month low hit in the previous session. (Reuters)
SummaryGold edged up on Thursday, pulling away from a one-month low hit in the previous session.

Gold edged up on Thursday, pulling away from a one-month low hit in the previous session when a weaker price forecast from Goldman Sachs triggered a sell-off, while investors await a European Central Bank meeting for clues on future policy path.

FUNDAMENTALS

Spot gold inched up 0.1 percent to $1,695.36 an ounce by 0040 GMT, hovering above a one-month low of $1,684.40 hit in the previous session.

U.S. gold was little changed at $1,692.20.

Gold's current price cycle will likely turn next year as a rise in real interest rates on the back of improved growth offsets any further balance sheet expansion from the Federal Reserve, Goldman Sachs said on Wednesday. Goldman cut its three, six and 12-month forecasts for gold prices.

The European Central Bank may give a guide to next year's policy path when it delivers fresh forecasts for the euro zone economy on Thursday at a meeting where it is expected to leave interest rates low.

Spain auctioned fewer bonds than it hoped to on Wednesday, prompting markets to ditch the country's debt as investors fret over the timing of an expected aid request by the government.

U.S. private sector hiring took a heavy hit in November due to the impact of storm Sandy that ravaged consumers and businesses in the north east, but the huge service sector continued to expand albeit at a modest pace.

Republicans and Democrats dug in on "fiscal cliff" talks on Wednesday, with both sides urging quick action but offering no compromises in a political stare-down that shows no signs of breaking.

MARKET NEWS

A volatile trading session ended with U.S. stocks mostly higher on Wednesday, even as Apple, the most valuable company in the United States, suffered its worst day of losses in almost four years.

The euro held its ground in early Asian trade on Thursday after slipping from a seven-week high against the dollar in the previous session, as investors awaited the European Central Bank policy meeting.

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