Gold futures jumped in the mid day Asia session today with the single currency appreciating ahead of the ECB rate setting meet today and amid some signs of progress on Greece's ongoing debt negotiations.
The ICE dollar index, which measures the greenback against a basket of six other currencies, traded at 78.565, down from 78.589 in late North American trading on Wednesday. The euro traded at $1.3280, up from $1.3264 late Wednesday.
Greek Prime Minister Lucas Papademos' office reportedly released a statement late Wednesday saying the key political parties have reached an agreement in principle on measures required for the country to receive its next aid package.
The European Central Bank is slated to announce a decision on interest rates later Thursday, as will the Bank of England. The ECB is likely to keep interest rates on hold at its policy meeting on Thursday but it may signal it is ready to cut rates in March.
Market players also expect banks to borrow about 400 billion euros from the ECB at its second cheap three-year funding operation planned at the end of the month, which many think is tantamount to a form of quantitative easing.
The Bank of England is expected to raise its target for gilt purchases to 325 billion pounds this month from 275 billion pounds to shore up the economy with the government's hands tied by its pledge to erase Britain's huge budget deficit.
COMEX February dated gold futures are trading up $9 at $ 1741 per ounce. The counter may face a resistance near $1760 levels today. While on domestic exchange, MCX front month gold futures are trading up nearly Rs 150 at Rs 28330 per 10 grams. It may face a resistance near Rs 28360 and Rs 28450-90 levels today.
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