Gold prices traded moderately higher in the immediate aftermath of a somewhat surprising move by the European Central Bank to cut its key interest rate Thursday. However, gains in gold quickly faded and fresh selling pressure surfaced because the U.S. dollar index shot sharply higher on the ECB news, while the Euro currency slumped. Then shortly after the ECB rate-cut news, U.S. gross domestic product data showed a much stronger-than-expected reading, to give the greenback an added boost and put downside price pressure on gold and silver. December Comex gold was last down $14.50 at $1,303.30 an ounce. Spot gold was last quoted down $13.60 at $1304.50. December Comex silver last traded down $0.243 at $21.525 an ounce.
The much-anticipated ECB monthly monetary policy meeting Thursday saw the central bank cut its key lending rate by 0.25%, to 0.25%. While there were growing beliefs the ECB would at some point cut its key interest rate and further ease its monetary policy, the majority of analysts and economists polled believed the ECB would not make any policy move on Thursday.
U.S. third-quarter gross domestic product came in at a surprisingly “hot” 2.8% annual growth rate, it was reported Thursday morning. This is significantly above the average forecast of up 2.5% seen for the report. The report quickly put selling pressure into the gold and silver markets and drove the U.S. dollar index to sharply higher price levels on the day.
via Kitco News