Gold Lower After ECB Statement Delivers More Dovish Rhetoric

Precious metals have seen lackluster action as investors have been watching developments, or a lack thereof, in U.S.-China trade negotiations. The tariff negotiations have been a focal point in metals trading because China is a big importer of commodities like gold and the duration of the dispute has been viewed as holding a potential to weigh on prices.

“The yellow metal has been under pressure as the US-China trade dispute appears near an agreement putting an end to back and forth tariffs and Brexit entering its final weeks,” wrote Alfonso Esparza, senior market analyst at Oanda, in a recent research note.

On Thursday, however, the tariff tiff may take a back seat to ECB President Mario Draghi & Co. The ECB’s policy statement is due at 7:45 a.m. Eastern Time, with a Draghi news conference scheduled for 8:30 a.m. Investors expect little action from the central bank on interest rates, but will watch to see if the central bank responds to weak eurozone economic indicators in recent months, including a recession in Italy, by delaying the potential timetable for rate increases or moving to provide further long-term liquidity to the region’s banks by renewing or extending a program of long-term loans.


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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