Gold up, Earnings after recovery; ECB adds to Fed pressure by Investing.com

By Barani Krishnan

Investing.com – Gold Longs got the hang of the arm they wanted after the cuts to the European Central Bank and its promise of quantitative easing on Thursday. This pushed the yellow metal to one-week highs exceeding $ 1,500, in anticipation of a similar action by the Federal Reserve.

for December, shipments climbed nearly $ 30 an ounce to the highs of the session before reducing these gains by $ 4.20, or 0.3% to $ 1,507.40 on the Comex division of the New York Mercantile Exchange. The highest was $ 1,531.95, the highest since July 6th. Tuesday, in December, gold hit its lowest level in a month, at $ 1,494.45.

, reflecting bullion trading, returned less than $ 1,500 after surpassing this resistance earlier. At 2:35 pm ET (18:35 GMT) bullion traded up $ 2.21 or 0.2% to $ 1,499.04. Thursday's high was $ 1,524.28 compared to $ 1,486.59 on August 13th.

The ECB lowered its deposit rate to a record low of -0.5%, while promising that rates would stay low longer. From 1 November, bond purchases will resume at 20 billion euros per month. The measures taken in the Eurozone push the Fed, which will hold its next political meeting on 17 and 18 September, to react with accommodative measures of its kind.

"The notion of infinite QE, until inflation converges" to 2%, represents a dovish bias of the ECB and will continue to see rates fall as yield reaches, ending up supporting gold, "said the Canadian brokerage group TD Securities in a note.

"With a tone of dovish from the ECB, and (President Donald) Trump continuing his pressure on Twitter in favor of a rate cut, it is likely that the market is seeking more transparency from the Fed. next week, "he added.

Trump, who has been blaming Fed President Jerome Powell for months for failing to cut rates more aggressively, tweeted on Wednesday that the central bank's "boneheads" should cut rates to "zero or less"

Most traders expect the Fed to cut rates by 25 basis points next week, similar to its July cut. Investing.com has given a 90% chance to such a Fed action on Thursday.

TD Securities said that if the US central bank risked disappointing precious metals for a long time, wanting a higher rate cut, there was still enough wind in the gold sails at the moment.

"The underlying economic weakness, the lopsided inclination of the central bank and the shortage of safe haven assets, as the pile of negative-yielding securities increases, still suggest that the path of least resistance for the Gold and friends is higher, "the statement added.