Gold prices slipped on Wednesday as the dollar jumped against the euro on news that the European Central Bank (ECB) is planning to cut its inflation forecast.
Gold futures were at $1,291.98 per troy ounce in early morning trade, down $5.50. Spot gold was trading at $1,289.36.
The dip marks an end to the yellow metal’s winning streak. Gold saw gains in the previous three sessions as investors fled to safe-haven assets ahead of market-moving events.
The euro dipped on news that the ECB is preparing to revise its inflation forecast. Weaker energy prices has forced the central bank to reconsider its inflation projections for 2017-2019.
Reports show that the ECB is now considering an inflation target of 1.5% through 2019, lower than its estimates of 1.7% for 2017, 1.6% for 2018, and 1.7% for 2019.
While forecasts for core inflation were little changed, according to the sources, growth projections were expected to be upwardly revised to 0.1%.
ECB Report Predicted to be Dovish
The ECB report sparked speculation that the ECB would maintain its dovish stance. The central bank will release its updated projections on Thursday during its monetary policy announcement.
While the dollar was higher against the euro, the currency slipped to a seven-week low against the yen. Investors are remaining cautious ahead of Britain’s election and the ECB’s monetary policy decision on Thursday. Market players are also awaiting former FBI chief James Comey’s testimony before the Senate Intelligence Committee.
The dollar was trading at 109.22 yen, down 0.2%. The euro hit an intraday low of 1.1206 against the greenback. Against the pound, the euro eased 0.52% to trade at 0.8688.
In other metals news, palladium fell 2.1% to trade at $830.75 per ounce, while platinum lost 0.8% to trade at $955.85.
Copper futures dipped 0.8 cents to $2.539 per pound. Silver futures fell 16.9 cents to $17.54 a troy ounce.
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