Gold Gains on Safe-Haven Demand Following ECB QE Announcement

(Kitco News) - Gold ended the U.S. day session with moderate price gains Thursday. Safe-haven buying interest was featured in the aftermath of the European Central Bank’s move to implement quantitative easing of its monetary policy. The QE package was more aggressive than most market watchers expected, which added some uncertainty to the market place Thursday. More chart-based buying was also featured in the gold market Thursday as the near-term technical posture for gold continues to improve. February Comex gold was last up $8.40 at $1,302.10 an ounce. Spot gold was last up $9.10 at $1,302.50. March Comex silver last traded up $0.212 at $18.405 an ounce.

The ECB will provide an additional 60 billion Euros per month in asset purchases (quantitative easing) until September of 2016. Media reports on Wednesday said the QE package would be 50 billion Euros a month. The Euro currency was pressured to an 11-year low against the U.S. dollar on the news. The ECB’s monthly monetary policy meeting was widely expected to find the central bank announcing a quantitative easing plan to invigorate the moribund European Union economy and ward off deflationary price pressures.

European bond markets rallied on the news, as did European and U.S. stock indexes. The rallying stock and European bond markets did take away some buying interest from the gold market. In late trading Thursday most market watchers and analysts were still digesting the ECB news, which means more active price action could occur on Friday.

The next big news event for the markets will be this weekend’s much-anticipated Greek elections, which could determine if that country remains a member of the European Union.

U.S. economic data out Thursday included the weekly jobless claims report, the monthly house price index, the weekly DOE liquid energy stocks report, and the Kansas City Fed manufacturing survey. Those reports were overshadowed by the ECB news.

The London P.M. gold fixing is $1,295.75 versus the previous A.M. fixing of $1,287.00.

Courtesy: Kitco News