Gold Rises Above $1500 Ahead of ECB

Gold Rate
Gold News
Gold Rises Above $1500 Ahead of ECB

Gold Rises Above $1500 Ahead of ECB

Last updated: September 12, 20194:53 IST By: Cihad Aydın, Emtia Analisti

After falling shortly due to rising risk sentiment following reviving optimism regarding trade dispute between the US and China, gold prices increased above $1,500 an ounce on Thursday as attention shifted towards ECB meeting that the central bank is expected to announce further monetary stimulus later today. ECB is expected to cut the rates to provide support to slowing Eurozone economy while the extent of possible monetary stimulus measures is still uncertain since policymakers have disagreements regarding quantitative easing. In the meantime, US President Donald Trump announced that he postponed additional tariffs on Chinese goods for two weeks as a sign of good will after China announced a list of goods that would be exempt from tariffs yesterday. Moreover, it is stated that China will import more US agricultural goods.

With reviving trade optimism due to gestures from both sides ahead of high-level trade talks expected in early October, gold prices firstly inched down but later on recovered and increased above $1,500 an ounce on Thursday as focus shifted to ECB meeting later today.

As of 14:17 GMT+3, spot gold was trading at $1,503.35 an ounce while dollar index was down to 98.54. US 10-year Treasury yield edged down to 1.723.

GoldSilver managing director Brian Lan said on Reuters that focus was on ECB meeting after the US postponed additional tariffs on China while adding gold did not fall further since investors were waiting due to uncertainty regarding ECB policy.

In its monetary meeting later today, as ECB is expected to cut the rates to prevent further slowdown in Eurozone economy, extension of policy measures that will be likely announced by the central bank is still uncertain as policymakers have disagreements regarding quantitative easing. Moreover, any sort of measure by ECB will likely have limited effect as slowdown in Eurozone economy is mostly caused by global trade war and Brexit. ECB will also publish updated growth and inflation projections which will both likely be downgraded alongside with postponing its rate hike plans further.

After China announced yesterday a list of US goods that would be exempt from tariffs, US President Donald Trump said on Wednesday that he postponed additional 5% tariffs that would normally take place on October 1 to October 15 as a sign of good will. Trump said it was “big move” by China ahead of talks and reiterated he wanted to have a deal with China. However it is stated that even though tensions eased with gestures from each sides, that did not mean sides were preparing for a deal and exemption of 16 type of goods from tariffs was an economic move rather than a gesture since China stated earlier that it was working on more goods to be exempt from tariffs, especially those with no alternatives. It is also significant to note that goods critical for the US like soybean and corn are not in the list of exempt goods.

On the other hand, China Commerce Ministry said today that Chinese companies had started inquiries about prices for US agricultural goods. Spokesman of the ministry Gao Feng said, working teams from both sides would start talks soon ahead of high level talks while stating that it was possible to import goods like pork and soybean as well. High level talks are expected to kickoff in early October.

Gold Rises Above $1500 Ahead of ECB

Important breaking news email for major happenings about gold

Recommended for you:

Gold Holds Tight Range Amid Fading Trade Optimism

Gold Prices Likely to Remain Volatile This Week

Gold Demand in India Loses Steam Due to High Prices

Gold Prices Fall to 1-Week Low Following Fed Statement

Nigeria’s Gold Refinery to Triple Capacity in the Next Five Years

Gold Hovers Around 6-Year High

Gold Exploration in Nusantara Indonesia

Kenyan Gold Miners Warned to Stop Using Toxic Mercury

Gold Steady And Eyes For Weekly Gain

Gold Plummets By Over 200 Rupees