Gold held is drop as investors await a monetary policy review from the European Central Bank and holdings in exchange-traded product backed by bullion fell.
Bullion for immediate delivery traded at $1,252.40 an ounce at 8:54 a.m. in Singapore after closing at $1,253.23 a day earlier, when prices lost 0.7 percent, according to Bloomberg generic pricing. Assets in exchange-traded funds shrank for the first time in 19 days, ending the longest run since 2010, according to data compiled by Bloomberg as of Tuesday.
The yellow metal is still up 18 percent this year as demand for haven assets surged amid volatility in financial markets and expectations of slow growth potentially leading to further monetary intervention. Updates from the ECB on Thursday and the Federal Reserve next week may shed light on the potential for more stimulus and the trajectory of interest rates.
Gold prices “broke support levels established in the last week,” Australia & New Zealand Banking Group Ltd. said in a note on Thursday. “We expect that the ECB will step-up its policy accommodation to support the economy in an environment of low inflation”.