Gold Higher As Spain Concerns Eased

Gold inched up on Thursday, tracking modest gains in the euro as worries about Spain’s debt restructuring eased after a European Central Bank official signaled the bank was ready to intervene in debt markets.

Spot gold inched up 0.1 percent to $1,659.49 an ounce, standing above the 20-day moving average at $$1,655.58.

Gold was little changed at $1,660.80.

Fear about Spain’s debt problem somewhat eased as ECB Executive Board member Benoit Coeure said the scale of market pressure on Spain is not justified given the reforms being undertaken by its government and the European Central Bank still has its bond-buying program as an option.

But worries persisted about the euro zone’s peripheral economies. Italy’s one-year borrowing costs rose for the first time since November at a sale of short-term bills on Wednesday, ahead of a major auction of three-year bonds later in the day.

The Federal Reserve’s ultra-easy monetary policy is appropriate given high unemployment and the headwinds facing the economy, the No. 2 official of the U.S. central bank said on Wednesday, as she left the door open to further action if needed.

According to Reuters, the U.S. Treasury debt prices fell on Wednesday, giving back much of the previous day’s gains as diminished worries over Europe’s fiscally troubled countries and new Treasury supply weighed on the market.

A record high gold price above $2,000 an ounce next year could mark the peak of the precious metal’s more-than-decade-long bull run as monetary policy in key economies starts to normalize, the chairman of metals consultancy GFMS said on Wednesday.

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