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Reuters reported that gold prices came back from near six year lows on Thursday after the European Central Bank (ECB) announced a cut in its deposit rate.
Reuters reported that gold prices came back from near six year lows on Thursday after the European Central Bank (ECB) announced a cut in its deposit rate.
As quoted in the publication:
The ECB cut its deposit rate to -0.30 percent from -0.20 percent, but left its main refinancing rate, which determines the cost of borrowing for banks at the ECB’s weekly auction, unchanged at 0.05.
The cut was smaller than some traders had expected, leading to a 3 percent rebound in the euro against the dollar.
“Every article I read and everyone I spoke to (ahead of the announcement) was thinking of a rate cut,” said Afshin Nabavi, head of trading at MKS.
“When they left (the main refinancing) rate unchanged, the market was rather shocked.”
Spot gold was up 1.1 percent at $1,064.71 per ounce at 3:22 p.m. EST (2022 GMT), after falling to its lowest since February 2010 at $1,045.85 an ounce. Earlier weakness came from Federal Reserve Chair Janet Yellen’s comment on Wednesday that shored up expectations for a U.S. rate hike this month.
