Gold prices holding steady up 1% as ECB reaffirmed commitment to supporting European economy

London (Apr 30)  The gold market is holding on to strong gains but is still little reaction after the European Central Bank reaffirmed it would do whatever it takes to support the European economy that has been rocked by the COVID-19 Pandemic.
After its monetary policy meeting Thursday, the ECB announced that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.

However, the central bank said that it will continue its pandemic emergency purchase programme (PEPP) for as long as necessary.

“The Governing Council is fully prepared to increase the size of the PEPP and adjust its composition, by as much as necessary and for as long as needed. In any case, it stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry,” the central bank said in a statement.

The ECB also announced a new series of long-term refinancing operations to support liquidity conditions in the euro area financial system and contribute to preserving the smooth functioning of money markets by providing an effective liquidity backstop.

The gold market is not seeing much movement following the ECB decision. The market has seen a strong rise since Wednesday after Federal Reserve Chair Jerome Powell reaffirmed the Fed’s commitment to supporting the U.S. economy.

He noted that in this health and economic crisis, deficits don’t matter.

June gold futures last traded at $1,730.60 an ounce, up 1% on the day.

KitcoNews