Gold lingers near one-month low as dollar strength weighs

Gold was little changed on Thursday, trading near a one-month low hit in the previous session, as fears of the economic impact from a fresh wave of the novel coronavirus in Europe kept the dollar around a one-week high it hit on Wednesday.

FUNDAMENTALS
Spot gold was little changed at $1,877.83 per ounce by 0050 GMT, after falling as much as 2% on Wednesday.


U.S. gold futures were flat at $1,879.60.

The dollar index was steady against a basket of six major currencies, pausing after clocking a gain of 0.3% in early trade.

French President Emmanuel Macron and German Chancellor Angela Merkel ordered their countries back into lockdown on Wednesday, as a massive second wave of infections threatened to overwhelm Europe before the winter.

The European Central Bank is expected to resist pressure to unveil fresh stimulus measures on Thursday but it will likely pave the way for action in December. The ECB will announce its policy decision at 1245 GMT.

The Bank of Japan is set to maintain its massive stimulus programme on Thursday and vow to take further action if the virus-led economic fallout threatens a return to deflation.

There is a high risk the resurgence in coronavirus cases halts the global economic recovery by year-end, according to Reuters polls of around 500 economists.

Holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.67% to 1,258.25 tonnes on Wednesday.

Silver rose 0.1% to $23.43 per ounce, while platinum dipped 0.1% to $866.96. Palladium was up 0.7% at $2,254.02.