Gold Trying Revive Back

Gold prices rose in the London session, the first increase in three days time. The sentiment is quite positive for the precious metal ahead of the European Central Bank injecting liquidity to be held February 29. Bloomberg surveys show ECB will provide low-cost loans as much as € 470 billion to the European banking sector liquidity in the auction of three years.

"As long as central banks loosen monetary policy and injecting excess liquidity into the market price of gold will continue to rise. However, $ 1800 will be a key resistance for today," said Li Ning, an analyst interviewed by Reuters. Li said gold could experience short-term correction if it again failed to penetrate the $ 1800 level, but $ 1750 will be a strong support. Meanwhile, Reuters technical analyst, Wang Tao, believe gold prices could reach $ 1797

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Euro edges higher in anticipation of European Central Bank's LTRO

The euro edged higher in Asian trading on Tuesday as markets waited for a second liquidity injection from the European Central Bank and should remain relatively buoyant until the LTRO operation on Wednesday. This second long-term refinancing operation involves three-year loans that European banks can access at lower rates, with the purpose of averting a liquidity squeeze.

Markets seemed to be unscathed by news of Greece's credit rating downgrade by Standard & Poor's late Monday, as this was already priced in. EURUSD opened in Asia at 1.3395 and climbed steadily to 1.3450. EURGBP rose to 0.8487from 0.8466.

The euro-Swiss franc pair hit a four-day high of 1.2056, compared to Friday's lowest point of 1.2038.

The seemingly firming market sentiment helped sterling trim losses against the dollar, with GBPUSD moving up from 1.5816 to 1.5847.

After an early dip to 80.00, USDJPY bounced to 80.63. EURJPY similarly fell early in the session to 107.28 and turned back up to 108.44.

Risk appetite helped push the Australian dollar higher against the greenback, with AUDUSD rising to a session high of 1.0786.

Looking ahead, main economic data to focus on in the upcoming European session are the Swiss UBS consumption indicator for January, Eurozone economic confidence index for February, German GfK consumer confidence index for March and the preliminary German CPI for February.

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