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Gold price holding gains but largely ignores ECB 25 basis point rate hike and little forward guidance
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(Kitco News) - While down from its all-time highs, gold prices are still holding on to solid gains, seeing little reaction as the European Central Bank raises interest rates by 25 basis points.
Thursday, the ECB raised interest rates across the board with the main refinancing operations, marginal lending facility and the deposit facility rising to 3.75%, 4.00% and 3.25% respectively.
Following its latest rate hike, there are some indications that the ECB is looking to pause its tightening cycle as it provides little forward guidance in its monetary policy statement.
“Overall, the incoming information broadly supports the assessment of the medium-term inflation outlook that the Governing Council formed at its previous meeting. Headline inflation has declined over recent months, but underlying price pressures remain strong. At the same time, the past rate increases are being transmitted forcefully to euro area financing and monetary conditions, while the lags and strength of transmission to the real economy remain uncertain,” the ECB said.
At the same time, the central bank reiterated its stance that its monetary policies would remain data-dependent.
The gold market is not seeing much reaction to the ECB’s rate hike. June gold futures last traded at $2,048.20 an ounce, up 0.55% on the day.
