What Will ECB Do And How Will Markets React?

Frankfurt (Oct 26)  On Thursday morning, the ECB will make many decisions -- interest rates, quantitative easing and other items. The euro currency and gold have been on edge the last few trading sessions, trying to anticipate what policymakers might do. With the markets on edge, they haven’t gone anywhere -- the euro is between $1.18 and $1.19 and gold from $1,270 to $1,290.

What we know for sure is the ECB is going to support the markets; however, other than a burst from the initial announcement in either direction, markets will go the path of least resistance. The moves can be big in either direction, but after the markets make the first move, they should settle in and trade to form.

We expect the euro currency to be lower but could see $1.19 or higher after the announcement. The metals should have a big reaction but when it’s all over, we expect gold and silver to work their way higher. It should be interesting.

KitcoNews