Investing.com - Gold prices bounced off their lowest level in more than two weeks on Thursday, as the dollar took a breather after its recent rally ahead of a key European Central Bank meeting later in the day.
The ECB is widely expected to stand pat on interest rates when it announces its monetary policy decision at 7:45AM ET (1145GMT) Thursday. Most of the focus will be on President Mario Draghi's press conference 45 minutes after the announcement, as investors look for more clues on when and how it could start unwinding its monthly quantitative easing program.
Market experts believe the ECB will announce that it will start trimming its monthly asset purchases to €40 billion from the current €60 billion beginning in January. They were mostly split on whether the program would last six or nine more months after that.
Sources close to the ECB's pre-meeting discussions say the a nine-month extension seems likely with debate over monthly volumes between €25-and-€40 billion a month.
But the real issue will be whether to keep the asset buys open ended, making another extension possible, or signal an eventual end of bond purchases, as demanded by hawks, including powerhouse Germany.
Comex gold futures rose $3.50, or around 0.3%, to $1,282.42 a troy ounce by 2:50AM ET (0650GMT) after touching its worst level since Oct. 6 at $1,272.00 in the last session.
The yellow metal recovered from an early decline to eke out a small gain Wednesday as the dollar and stocks lost some steam after a recent rally.
Meanwhile, market watchers continued to grapple with uncertainty over who will become the next Federal Reserve chief and how that will influence the outlook for interest rates.
President Donald Trump had on Tuesday polled the Republicans on whether they would prefer Stanford University economist John Taylor or current Fed Governor Jerome Powell for the job, and more senators preferred Taylor.
Taylor is seen as someone who may put the Fed on a path of faster interest rate increases compared to current Fed chair Janet Yellen, whose term expires next February.
The dollar index, which measures the greenback's value against a basket of six major currencies, was a shade lower at 93.46, edging away from a two-week high of 93.90 set on Monday.
Elsewhere on the Comex, silver futures tacked on 9.0 cents, or 0.5%, to $17.01 a troy ounce. Among other precious metals, platinum was little changed at $926.30, while palladium gained 0.7% to $964.28 an ounce.
Meanwhile, copper futures shed 0.7 cents, or 0.2%, to $3.176 a pound. It hit its best level since Aug. 2014 at $3.239 on Tuesday, boosted by expectations of strong economic growth in China, the world's top user of the red metal.