(Kitco News) - The gold market is holding on to solid gains against the euro even as the European Central Bank holds interest rates steady.
On Thursday, the ECB said its interest rates on the deposit facility, the main refinancing operations, and the marginal lending facility will remain unchanged at 2.00%, 2.15%, and 2.40%, respectively. The decision was in line with market expectations.
According to the central bank’s monetary policy statement, the committee is taking its time to assess the current economic environment.
“The economy has continued to grow despite the challenging global environment. The robust labour market, solid private sector balance sheets and the Governing Council’s past interest rate cuts remain important sources of resilience. However, the outlook is still uncertain, owing particularly to ongoing global trade disputes and geopolitical tensions.
The Governing Council is determined to ensure that inflation stabilises at its 2% target in the medium term,” the central bank said in its monetary policy statement. “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, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council is not pre-committing to a particular rate path.”
The gold market is not seeing much reaction to the ECB’s latest monetary policy decision. Gold’s gains against the euro are in line with broader moves in the global currency market.
Against the euro, spot gold last traded at €3,437 an ounce, up nearly 1.5% on the day. Meanwhile, spot gold last traded at $3,970 an ounce against the greenback, up 1% on the day.
