Gold prices are holding at moderately lower levels in late-morning action Thursday. The yellow metal did push up to about unchanged on the day just after the European Central Bank announced that it is keeping interest rates unchanged and will extend the ECB’s bond-buying program by nine months, to the end of 2017. However, the ECB in April will reduce its monthly bond purchases to 60 billion Euros, from 80 billion currently. The marketplace initially deemed that news as a bit hawkish on ECB monetary policy. The Euro currency rallied sharply and the U.S. dollar index sold off.
However, as ECB President Mario Draghi gave his press conference, traders and investors saw his remarks as favoring the monetary policy doves, as he implied the ECB remains fully ready to stimulate the Euro zone economy, if conditions warrant. The Euro currency and dollar index quickly reversed courses as the Euro dropped sharply and the USDX rallied strongly. The rally in the greenback helped to push gold prices back to near their daily lows.
Trader and investor focus will quickly move to next week’s FOMC meeting, where the Federal Reserve is expected to raise U.S. interest rates.