Gold Near 3-Month High On ECB Hopes

Gold on Wednesday hovered near a 3-1/2 month high hit in the previous session, as investors remained hopeful the European Central Bank would soon take action to contain the region’s debt crisis.

Spot gold was little changed at $1,638.49 an ounce by 0308 GMT, after hitting $1,641.20 in the previous session, its highest since early May.

The U.S. gold futures contract for December delivery   edged down 0.1 percent to $1,641.20.

Recent media reports said the ECB has been mapping out details to cap Spanish and Italian borrowing costs, easing investor worries about the euro zone’s festering problems, though the bank tried to quash such speculation.

The prospect of ECB intervention pushed Spanish, Italian and Portuguese yields down, and fuelled interest in gold, a hedge against rampant cash printing by central banks.

‘We are getting sick and tired of the crisis. We want to get rid of it,’ said Dominic Schnider, an analyst at UBS Wealth Management.

Gold is poised to test its 200-day moving average, at $1,642.57, ahead of the central bank symposium in Jackson Hole, Wyoming, at the end of August, he added.

Reuters