Make Kitco Your Homepage

Gold Priced In Euros Erases Gains As ECB's Draghi Paves Way For Fresh Stimulus

Kitco News

Ed Note: We are proud to unveil our new mining page, an entire space dedicated to up-to-the-minute news, with exclusive industry interviews and all the relevant information you need, rounded in up in one spot. Who is merging? Who is Buying? Who is Digging? We got you covered!

Gold Priced In Euros Erases Gains As ECB’s Draghi Paves Way For Fresh Stimulus

(Kitco News) - European Central Bank President Mario Draghi sounded dovish, signaling that a rate cut is on its way following the Bank’s decision to keep rates steady on Thursday.

“We expect [rates] to remain at their present or lower levels at least through the first half of 2020 or as long as necessary,” Draghi said during the press conference. “[There’s a] need for a highly accommodative stance of monetary stance for a prolonged period of time as inflation rates both realized and projected were both below levels.”

The ECB president pointed to a number of risks and disappointing inflation as the reasons for requiring a highly accommodative monetary policy.

“[The central bank] stands ready to adjust all instruments as appropriate to ensure inflation moves towards its aim,” Draghi said. “The risks remain tilted to the downside related to geopolitical factors, the rising threat of protectionism, and vulnerabilities in emerging markets.”

In terms of the economic outlook, Draghi stated that things are getting “worse and worse in manufacturing especially,” highlighting the recent weak data out of Germany.

Draghi also noted that a possibility of a hard Brexit needs to be taken into account as well when making any future projections.

When asked about what will come first QE or a rate cut, Draghi did not specify while noting that all instruments are on the table.

In addition, Draghi highlighted that if the economic situation deteriorates much further, fiscal policy will becoming more important.

“If there were to be a significant worsening … fiscal policy would become of the essence,” he said.

Earlier this morning, the ECB left the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility at 0.00%, 0.25% and minus 0.40% respectively.

Gold priced in euros erased all daily gains and was last trading at EUR1,276.22, down 0.22% on the day, according to Kitco’s aggregated charts.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.