(Kitco News) - The gold market continues to hit records across the board against global currencies as it holds on to significant gains against the euro even as the European Central Bank leaves interest rates unchanged.
In a much-anticipated move, the ECB said in its monetary policy statement 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 4.50%, 4.75% and 4.00% respectively.
Although the ECB has lowered its inflation expectations for this year, the central bank has not signaled that it is ready to lower interest rates just yet.
While some analysts have said they expect the ECB to start laying the groundwork for a rate cut, it is unlikely they will be ready to move in April.
The gold market remains well supported following the ECB’s latest monetary policy decision as it trades near session highs. Spot gold last traded at €1,985.37 an ounce, up 0.70% on the day.
In its updated projections, the central bank expects inflation to average 2.3% in 2024, 2.0% in 2025 and 1.9% in 2026. The projections for inflation excluding energy and food have also been revised down and average 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026.
At the same time the ECB has also lowered its growth projections. The central bank sees the European economy expanding by 0.6% this year, with a pickup of 1.5% next year and steady growth of 1.6% in 2026.
Analysts have said that they will be paying close attention comments from ECB President Christine Lagarde to gauge the central bank’s timeline for potential rate cuts.
