Gold edges up, volume thin on murky cenbank outlook

Wed Aug 8, 2012 1:59pm EDT
 
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By Frank Tang

NEW YORK (Reuters) - Gold edged up, but remained in a tight range, on Wednesday as trading was quiet again due to investor uncertainty about whether central banks would act to stimulate frail economies.

Comments from Bank of England Governor Mervyn King saying there was no urgent need to print more money dampened sentiment among bullion investors looking for more aggressive actions from central banks.

Traders said last week's lack of firm commitments by the Federal Reserve and the European Central Bank kept the gold market guessing on whether central bankers would use gold-friendly monetary stimulus, or refrain from further action, which is likely to spur selling.

Volume in U.S. gold futures was weak for a third consecutive day. Slim gains in U.S. equities and crude oil failed to inspire a further rally in the metal.

"There appears to be little investor enthusiasm to push gold prices in any clear direction. A dearth of important economic releases this week and thin summer turnover may leave gold trading in a near-term no-man's land," said James Steel, HSBC's chief commodity analyst.

Spot gold inched up 0.1 percent at $1,613 an ounce by 1:28 p.m. EDT (1728 GMT), recovering from losses earlier in the session.

U.S. gold futures for December delivery were up $3.10 an ounce at $1,615.90, with volume sharply below its 30-day average, preliminary Reuters showed.

Physical buying in gold remained disappointing.   Continued...

 
Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. REUTERS/Ajay Verma