Gold Price Remains Under Pressure As ECB Leaves Rates Unchanged

London (Jan 19)  Gold prices are relatively unchanged, weaker on the day as the European Central Bank left interest rates unchanged.

Thursday, following its monetary policy meeting, the ECB decided 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 -0.40% respectively.

Markets will not wait for ECB President Mario Draghi’s press conference to be held at 8:30 a.m. EST. Gold prices were under pressure ahead of the decision and remain unchanged with February gold last trading at $1,203.4, down 0.72% on the day.

Although economic data has steadily improved -- with inflation, in particular picking up -- in the Eurozone, economists expect Draghi to maintain a dovish tone at the press conference. He is expected to highlight growing uncertain for economic growth as U.K. Prime Minister Theresa May has been striking a hard tone ahead of official negations that would see Britain leave the European Union. She has said that she would like to see UK complete exit the single market

“Mr Draghi is likely to highlight again that core inflation is not on an upward path and also express concern about the impact of political uncertainty on growth and financial markets this year,” saidJennifer McKeown, chief European economist at Capital Economics.

Source: Reuters