Gold prices moved higher on Thursday, gaining in strength after the European Central Bank slashed the deposit rate and restarted its asset purchase programme.
However, slightly easing worries about U.S.-China trade war after U.S. President Donald Trump said he is temporarily delaying raising tariffs on about $250 billion worth of Chinese exports increased the risk appetite in the market and limited the yellow metal’s gains.
The ECB’s policy move has now raised hopes that the U.S. Federal Reserve, scheduled to meet next week, will also cut interest rates and announce measures to support economic expansion.
The dollar index declined to 98.19 and then edged up a bit to 98.32, still staying in negative territory with a loss of about 0.33%.
Gold futures for December ended up $4.20, or about 0.3%, at $1,507.40 an ounce, well off the day’s high of $1,532.20 an ounce.
On Wednesday, gold futures for December ended up $4.00, or about 0.3%, at $1,503.20 an ounce.
Silver futures for December ended up $0.007, at $18.177 an ounce, while Copper futures for December settled at $2.6405 per pound, gaining $0.0260 for the session.
Calling the move a “gesture of good will,” Trump delayed raising the tariffs rate from 25% to 30% from October 1st to October 15th.
The European Central Bank today announced a host of stimulus measures to boost the euro area economy in the final rate-setting session chaired by the outgoing President Mario Draghi.
The central bank slashed the deposit rate by 10 basis points to -0.5%, while it left the main refinancing rate and the marginal lending rate unchanged at 0% and 0.25%, respectively.
The ECB restarted its asset purchase programme, or APP, which it had previously ended in December 2018. The bank said it will make monthly asset purchases of EUR 20 billion from November 1 and that the new APP will “run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.”
The material has been provided by InstaForex Company – www.instaforex.com