(Kitco News)—Gold is not reacting much to the European Central Bank’s decision to leave interest rates unchanged. The precious metal is experiencing broad-based selling pressure from technical profit-taking against major global currencies.
As expected, the ECB left its main refinancing operations and the marginal lending facility unchanged at 2.00%, 2.15% and 2.40% respectively.
Improving economic activity and subdued inflation growth is giving the central bank some breathing room to evaluate its monetary policy.
“The Governing Council is determined to ensure that inflation stabilises at its 2% target in the medium term. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it,” the central bank said in its monetary policy statement.
In its updated staff economic projections, the ECB said it sees headline inflation averaging 2.1% in 2025, 1.7% in 2026 and 1.9% in 2027. For inflation excluding energy and food, the central bank is looking for an average of 2.4% in 2025, 1.9% in 2026 and 1.8% in 2027.
Meanwhile, the economy is projected to grow by 1.2% in 2025, revised up from the 0.9% expected in June. The growth projection for 2026 is now slightly lower, at 1.0%, while the projection for 2027 is unchanged at 1.3%.
The ECB’s latest monetary policy decision is not having much impact on gold as prices remain near its overnight all-time highs above €3,000 an ounce. Spot gold last traded at €3,101 an ounce, down 0.39% on the day.
