Gold Boosted by ECB Possible Demand

Gold climbed to the highest in two weeks on speculation the European Central Bank may purchase assets including bullion to counter low inflation and as Russia indicated it added more metal to its reserves.

Russia’s central bank has bought about 150 metric tons of bullion this year, Governor Elvira Nabiullina told lawmakers in the State Duma today. That would imply the nation added about 35 tons since the end of September, the most recent available month of reserve data the International Monetary Fund compiles. Continued Russian buying would add some support to prices, said Ole Hansen, head of commodities strategy at Saxo Bank A/S.

ECB President Mario Draghi said yesterday that unconventional measures may include the purchase of a variety of assets to stimulate the economy. The central bank could theoretically buy sovereign debt, gold, exchange-traded funds, and even real estate to counter a longer period of low inflation, Executive Board member Yves Mersch said, while warning against rushing in.

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