(Kitco News) - The gold market continues to base-build at key long-term support levels even as the European Central Bank takes a neutral stance on monetary policy in the face of persistent inflation threats.
As expected, the ECB left interest rates unchanged following its monetary policy meeting Thursday. The central bank said its interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will remain unchanged at 2.25%, 2.40% and 2.65% respectively.
The central bank also provided little forward guidance, as the global economy continues to navigate the impact of renewed military actions in the Middle East.
“The outlook for energy prices, while highly volatile, currently stands close to the baseline of the June Eurosystem staff projections and well above the levels recorded prior to the conflict in the Middle East. Uncertainty remains high and the full inflationary impact of the energy shock has yet to play out. The Governing Council is therefore closely monitoring the intensity and duration of the shock, as well as its indirect and second-round effects. The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term,” the central bank said in its monetary policy statement.
The ECB’s latest rate decision is not having much of an impact on gold prices. Spot gold last traded at €3,580.24 an ounce, down 1% on the day.
Gold’s price action against the euro is in line with the broader market. Spot gold last traded at $4,074.50 an ounce, down 1.33%.
