‘Gold eased in Europe on Tuesday as the dollar index rose, but its range was limited as investors awaited clues from U.S. data due this week on the prospect of further monetary easing in the United States.
The Federal Reserve will discuss at a meeting in Washington next week whether to extend its quantitative easing policy to accelerate growth. This could have significant implications for the dollar and inflation, and consequently gold.
Spot gold was bid at $1,333.66 an ounce at 1257 GMT, against $1,338.00 late in New York on Monday. U.S. gold futures for December delivery eased $4.50 an ounce to $1,334.40.
Prices hit a record $1,387.10 an ounce earlier this month as the dollar slid amid expectations the Fed would vote in favor of QE at its upcoming policy meeting, but retreated as investors worried the prospect had become too heavily priced in. ‘We think (gold) will head higher, but clearly there will be corrections along the way,’ said David Wilson, an analyst at Societe Generale. ‘I expect after Nov 2-3, when we get more clarity over QE2, we should see more positive momentum.’ ”
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