Gold was little changed above an 11-week low in New York as investors weighed speculation reduced prices will spur purchases as the dollar strengthens.
Gold’s 14-day relative-strength index fell this week toward the level of 30 that suggests to some traders who study technical charts that prices may be poised to rebound. The dollar climbed to a seven-month high against 10 major currencies after the European Central Bank unexpectedly cut interest rates, and before data due tomorrow that may show U.S. companies boosted payrolls in August by more than 200,000 for a seventh-straight month.
Bullion rose 5.7 percent this year as traders assessed political unrest against the outlook for higher U.S. interest rates. Russian President Vladimir Putin and his counterpart Petro Poroshenko agreed yesterday on steps to end more than five months of fighting in Ukraine’s eastern regions. European Union diplomats discussed further sanctions, possibly by the end of the week, to punish Putin for aiding pro-Russian rebels, an allegation the government in Moscow denies.
“Physical demand in the Far East did help buoy prices,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. Geopolitical events “may have greater influence on gold in the near term. Bullion prices are likely to stay under pressure, especially if the U.S. dollar gains.”
Gold for December delivery was little changed at $1,270.90 an ounce by 8:07 a.m. on the Comex in New York. It reached $1,261.90 yesterday, the lowest since June 17. Bullion for immediate delivery was also little changed at $1,269.77 in London, according to Bloomberg generic pricing.
Futures trading volume was 16 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg show.
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