* ECB, BOJ and BOE policy meetings due later this week
* Spot gold may rebound to $1,589/oz - technicals
* Coming Up: Euro zone Markit services PMI; 0858 GMT
(Adds details; updates prices)
By Rujun Shen
SINGAPORE, March 5 (Reuters) - Gold firmed on Tuesday to
snap four sessions of decline, with investors expecting major
central banks to stick to loose monetary policy at meetings
later this week, supporting bullion's appeal as a hedge against
inflation.
A weaker dollar also lent support to gold, as it makes
dollar-priced commodities more affordable for buyers holding
other currencies.
Loose monetary policies have helped gold rally the past few
years, as investors fearing higher inflation as a result have
parked funds in gold to hedge against rising prices.
But gold's bull run wound down in the past few months as
speculation mounted that the U.S. Federal Reserve may curtail
its bond purchase programme sooner rather than later, as the
world's top economy showed signs of recovery.
Some senior Fed officials have insisted on continuing the
expansionary monetary policy, arguing the economic growth was
not strong enough to reinvigorate the labour
market.
"We are going through a very slow period and it is a
situation where we need central banks to step up," said Jeremy
Friesen, commodity strategist at Societe Generale in Hong Kong.
"If they do, it will be good for gold."
Spot gold rose nearly half a percent to $1,580.76 an
ounce by 0627 GMT. U.S. gold was also up half a percent,
to $1,580.30.
Technical analysis suggested spot gold is expected to
rebound to $1,589 an ounce, as indicated by its wave pattern and
a Fibonacci projection analysis, said Reuters market analyst
Wang Tao.
CENTRAL BANKS
The balance sheet of the European Central Bank has
effectively shrunk due to the early payment of a chunk of
three-year crisis loans by banks, in contrast to the Fed's
ongoing $85-billion monthly bond buying and the Bank of Japan's
plan for aggressive monetary policy.
If the ECB launches more stimulus, or other central banks'
accommodative measures offset the ECB's de facto tightening,
gold could get a boost, Friesen added.
The ECB, BOJ and Bank of England will hold their policy
meetings later this week, and investors are waiting to see if
any further stimulus programmes are approved.
Physical buying continued in Asia, though some buyers have
moved to the sidelines of the market waiting for a clear
direction in prices.
"We are not seeing as much buying as last week," said Brian
Lan, managing director at GoldSilver Central Pte Ltd in
Singapore.
"Most people did their purchases last week and are now
holding back, wondering whether prices will fall further, before
they commit themselves to buy more."
Gold contracts traded on the Shanghai Gold Exchange remained
at premiums of about $20 an ounce above spot gold, luring
Chinese buyers to the global market.
Investors continued to exit the SPDR Gold Trust, the
world's top gold-backed exchange-traded fund, which fell for the
tenth straight session on March 4 to a seven-month low of
1,253.283 tonnes.
Precious metals prices 0627 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1580.76 7.42 +0.47 -5.60
Spot Silver 28.77 0.22 +0.77 -4.99
Spot Platinum 1576.75 11.82 +0.76 2.72
Spot Palladium 717.47 3.00 +0.42 3.68
COMEX GOLD APR3 1580.30 7.90 +0.50 -5.70 16042
COMEX SILVER MAY3 28.78 0.28 +0.98 -4.81 3687
Euro/Dollar 1.3036
Dollar/Yen 93.06
COMEX gold and silver contracts show the most active months
(Editing by Tom Hogue)
The Newman government says it will break an election promise by failing to reach a fiscal surplus in two years …
