"Bullion historically performs well during periods of ultra-loose monetary policies and the prospect for monetary policy tightening may keep a lid on gold in near-term,'' said James Steel, HSBC chief precious metals analyst.
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Although a steady scaling back of the program is now largely priced into the market, any sign that it is moving more quickly or slowly than expected could still affect gold prices.
Demand for 'new' jewelry in India—until recently the world's largest bullion buyer—was fairly light as most consumers make use of old gold jewelry recycled into new pieces for the wedding season, dealers said. Premiums stayed steady at $80 an ounce over London prices.
Chinese buying has slowed this week as traders and consumers wrap up for the Lunar New Year holiday, which starts on Jan. 31. Chinese markets will be closed until Feb. 6.
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