Gold price keeps going down as ECB leaves rates unchanged

NEW YORK (March 19) Gold continues to see a precipitous drop, facing global headwinds as rising energy prices prompt central banks to position their monetary policies for higher inflation pressures. In a consistent theme this week, the European Central Bank was the last central bank to hold interest rates steady.

In a widely anticipated move, the ECB announced it would leave its interest rates on the deposit facility, the main refinancing operations, and the marginal lending facility unchanged at 2.00%, 2.15%, and 2.40%, respectively.

The ECB said that the war in Iran has created significant uncertainty for the global economy, creating upside risks for inflation and downside risks for economic growth.

“It will have a material impact on near-term inflation through higher energy prices. Its medium-term implications will depend both on the intensity and duration of the conflict and on how energy prices affect consumer prices and the economy,” the central bank said in its monetary policy statement. “The Governing Council is well positioned to navigate this uncertainty.”

The gold market is not seeing any major reaction to the ECB’s announcement, as it continues to face significant selling pressure. Against the euro, spot gold last traded at €3,969.59 an ounce, down nearly 6% on the day.

Gold’s selloff against the euro is broadly in line with the global market. Spot gold last traded at $4,564.20 an ounce, down slightly more than 5% on the day.

According to the latest ECB economic projections, the central bank has increased its inflation expectations as it lowers its growth forecasts.

The ECB sees headline inflation averaging 2.6% in 2026, 2.0% in 2027, and 2.1% in 2028.

“Inflation has been revised up compared with the December projections, especially for 2026. This is because energy prices will be higher owing to the war in the Middle East,” the ECB said.

Meanwhile, the central bank expects economic growth to average 0.9% in 2026, 1.3% in 2027, and 1.4% in 2028.

“This implies a downward revision, especially for 2026, reflecting the global effects of the war on commodity markets, real incomes, and confidence,” the central bank said.

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