ECB Confirms it Won’t Buy Gold As Part of QE

Mario Draghi, president of the European Central Bank, has confirmed that the central bank will not buy gold as part of its asset-backed purchase program.

Draghi made the comment Thursday during the question and answer period of his monthly press conference following the ECB’s monetary policy meeting. He was asked what types of assets the governing council would buy as part of its quantitative easing program.

He responded, “we discussed all assets but gold.”

Speculation arose that gold could be part of the central bank’s asset purchases after Yves Mersch, a member of the ECB executive board, said on Nov. 17 that the central bank has broad range of options in its current quantitative easing program. As an example, he mentioned that gold could be a “theoretical” option.

Some analysts had not taken the comment too seriously as it would take significant gold purchases to impact the ECB’s balance sheet.

Following its monetary policy meeting, the ECB said it would leave the main refinancing operation at 0.05%. Its marginal lending facility rate stands at 0.30% and its deposit facility remains at negative 0.20%.

via Kitco

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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