NEW YORK: 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 U.S 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 US gold futures was weak for a third consecutive day. Slim gains in US 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 per cent at $1,613 an ounce, recovering from losses earlier in the session.
US 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.
Gold demand in major consumer India was soft at the start of the festival season, meanwhile, with rural buyers staying on the sidelines, preferring to hold on to their cash at a time when deficient monsoon rains threaten to dent their incomes.
The rural population accounts for 60 per cent of the gold demand from India. Gold buying has already been hit in India by rupee weakness, which keeps local prices high, and by a hike in import taxes aimed at cutting the trade deficit.
In China, which is currently vying with India as the world's top buyer of gold, the trading volume on the popular gold spot deferred contract on the Shanghai Gold Exchange was down nearly 30 per cent from July's average daily volume.
Among other precious metals, silver was up 0.1 per cent at $28.10 an ounce, while of the platinum group metals, platinum was down 61 cents at $1,401.99 an ounce and palladium was up 0.7 per cent at $583.97 an ounce.