MTECHTIPS;-Gold flat despite weaker dollar ahead of ECB meeting

MTECHTIPS;-Gold flat despite weaker dollar ahead of ECB meeting

MTECHTIPS- Gold prices were flat on Thursday, despite a move lower in the dollar ahead of the outcome of the European Central Bank’s final policy meeting of 2016 later Thursday. Gold was trading at $1,177.15 a troy ounce by 10:05 GMT, almost unchanged for the day. The dollar slid lower against a basket of six other major currencies, with the U.S. dollar index down 0.21% to 100.08, not far from a three-week low of 99.87 set on Monday. The ECB is seen as likely to announce an extension of its €80 billion a month quantitative easing program, which is on track to end in March 2017, but may also signal that a decision on when it will begin tapering asset purchases could come soon. Gold remained under pressure ahead of an expected interest rate hike by the U.S. central bank at its upcoming policy meeting next week. Recent solid U.S. economic reports have indicated that the economy is on track, lending credence to the view that the Fed will raise interest rates. According to Investing.com’s Fed Rate Monitor Tool, 100% of traders expect the Fed to raise interest rates at the meeting. Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.

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