Gold Retains Losses, Silver Below 11-Month Top as Dollar Firms

Gold held overnight losses on Thursday, while silver steadied below an 11-month top as the dollar firmed against the euro and equities inched higher.

Gold held overnight losses on Thursday, while silver steadied below an 11-month top as the dollar firmed against the euro and equities inched higher.

Spot gold was little changed at $1,243.90 an ounce by 0046 GMT (6:16 a.m. in India), after dropping 0.5 per cent in the previous session.

US gold futures eased 0.6 per cent to $1,246, catching up with moves in the spot market.

The dollar rose 0.5 per cent against a basket of major currencies on Wednesday as the euro slipped ahead of the European Central Bank meet on Thursday.

The greenback hit a two-week high against the safe-haven yen. It also rallied more than 1 per cent against the Swiss franc, another currency often viewed as a safe haven, to a more than three-week high.

Risk appetite also boosted global stocks which tracked oil prices higher. Oil prices jumped 4 per cent on Wednesday as government data showed US crude stocks rose slightly less than expected last week.

Spot silver steadied at $16.94 an ounce. It rose to an 11-month high of $17.23 on Wednesday, but gave up gains to close the session flat.

Silver has outperformed other precious metals in recent days, helped by a break through chart resistance at its late October high on Tuesday and increasing optimism about China. Silver has more industrial use than the other precious metals.

Bullion traders will be eyeing the ECB meeting later in the session for any impact on the dollar. The ECB is not expected to make any policy change at its rate-setting meeting on Thursday.

The focus will also be on US economic data that could affect the Federal Reserve's monetary policy.

The euro remained on the defensive early on Thursday, having made an about-face as investors adjusted positions in the lead up to a policy meeting by the European Central Bank.