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Gold advances on growth hopes ahead of central banks meetings

Publish Date06/03/2013 07:51:12 AM

Last Update06/03/2013 08:08:40 AM

Gold advances on growth hopes ahead of central banks meetings

Precious-Gold advanced for a second day on Wednesday ahead of anticipated monetary decisions by three major central banks due on Thursday, while investors expect the banks to stick to their loose monetary policies reviving bullions` inflation-hedge appeal.

While South Korea joined Russia and Kazakhstan in boosting gold holdings, the Central Bank of Korea (BOK) announced on Wednesday it added 20 tons of gold in February, raising total holdings by 24 percent to 104.4 tons, the decision that supported gold’s sentiment.

Spot gold is trading around $1577.76 per ounce by 09:39 (GMT+2) after opening at $1575.28, hitting a high of $1580.06 and a low of $1575.09 an ounce.

Silver traded at $28.71 an ounce after opening at $28.47, hitting high at $29.08 and low at $27.94 an ounce.

The European Central Bank, the Bank of England and the Bank of Japan are all expected to continue with expansionary monetary policy. The only surprise could be in the form of more quantitative easing by these central banks.

Eyes will track the ECB rate decision amid expectations of wtinessing a hold in interest rate at its record low of 0.75%. Thereafter, ECB President Mario Draghi will deliver a press conference.

The BoE is predicted to keep both interest rate and APF quantity at 0.50% and 375 billion pounds.

The trading range for gold today is expected between the key support at $1570.00 and the key resistance now at $1590.00.

Investors turned their attention toward the equities market, with the Dow Jones Industrial Average hitting a record high since 2007 after data on showed service industries in the U.S. expanded in February at a fast pace.

Additionally, investors are keen to see Friday`s jobs report which will determine whether there is improvement in U.S. labor market after the Federal Reserve`s announcement of further stimulus. The Fed ties the continuation of its accommodative monetary policies with the improvement in the labor sector.

As of 09:42 (GMT+2), the dollar index hovered around 82.03 after opening at 82.02, where it hit a high of 82.06 and a low of 81.92.

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