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Gold eased early on Wednesday but managed to retain most of its overnight gains to trade close to the key $1,200-an-ounce level on a weak dollar.
Spot gold had slipped 0.3 per cent to $1,194.20 an ounce by 0027 GMT. The metal jumped to a near three-week high of $1,204.70 on Tuesday and closed up about 1 per cent.
Gold got a boost from a softer dollar, which fell against the euro on a better-than-expected survey of German sentiment.
BoJ policy meet
Investors are eyeing the Bank of Japan’s policy meeting later today to see how the greenback and yen will be impacted. After the Japanese central bank’s last meeting on October 31, when it announced a surprise stimulus expansion, gold saw a huge sell-off that took it to 2010 lows.
US data awaited
Markets were also awaiting more US data on Wednesday to gauge the strength of the economic recovery. Data on Tuesday showed that US producer prices unexpectedly rose in October, but the underlying trend continued to point to a benign inflation environment that could bolster the Federal Reserve’s resolve to keep interest rates very low a bit longer.
Curbs on gold imports
Regulatory developments in second biggest consumer India were also eyed for cues. India is likely to announce new measures to curb gold imports, including possible restrictions on a group of private trading firms.
Russia's central bank has bought around 150 tonnes of gold to add to its reserves so far this year, the bank’s Governor, Elvira Nabiullina, told the Lower House of parliament on Tuesday.
Gold currently constitutes around 10 per cent of the bank’s gold and forex reserves, she added.
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