Gold Volatility Higher After ECB Lack of Updates

Gold in euro terms saw increased volatility Thursday after European Central Bank President Mario Draghi did not provide any guidance on a potential expansion of the monthly bond-purchase program. The comments came after the ECB left interest rates unchanged.

“We didn’t discuss tapering or the horizon of purchase programs,” he said during the question and answer portion of his press conference.

He said that this is a discussion the council is expected to have in December, noting that the members “want to see all the inputs useful to this discussion.”

In the comment on the program, Draghi said that an “abrupt” ending to the bond purchases is unlikely to happen.

The future of the ECB’s bond-purchase program has garnered a lot of market attention and influencing gold prices; some commodity analyst noted that rumors and speculation about possible tapering helped push the market through key technical support levels at the start of the month.

Many economists were not expecting Draghi to provide much guidance on the central banks monthly bond-purchase program; however, some were expecting at least a hint that an extension would be announced in December.

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