Gold Rallies After ECB’s Draghi Comments

Gold climbed the most in three weeks as commodities held declines, heading for the longest losing streak since January, after the European Central Bank unveiled measures to spur the economy and fight deflation.

The Standard & Poor’s GSCI gauge of 24 raw materials fell 0.4 percent for a fifth day of declines, lead by soybeans and wheat. Gold rallied as much as 1.1 percent to $1,257.73 an ounce in London, the biggest gain since May 14, as some traders closed bets on falling prices. Copper also fell.

The ECB today cut all three main rates and became the first major central bank to charge fees on deposits. The central bank’s president, Mario Draghi, said the package of measures to bolster the economy also included targeted longer-term loans, and officials will also start work on purchases of asset-backed securities.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza