FY: Gold Prices held Steady as Investors wait Bolder Actions from ECB after Merkel’s Support’ Silver Prices Lower
Gold Prices hovered around $ 1,615 an ounce on Friday as bullion investors anticipate the European Central Bank (ECB) to swiftly swing into action following German Chancellor, Angela Merkel’s support to the central bank’s President Mario Draghi’s ongoing efforts to curb debt crisis. Meanwhile, silver prices edged lower in early trading on Friday.
For quite some time now, bullion investors have been waiting for more aggressive stance from the ECB. During ECB’s latest policy meeting in Brussels, Draghi mentioned to do “whatever necessary” to preserve the euro. Besides, he also hinted at resumption of bond buying program at that moment. However, the sentiment in the bullion was edgy since then as the central bank stopped short of taking any action, raising doubts over implementation of the proposed measures.
With German Chancellor now showing support to ECB’s proposed moves, expectations are rising that euro zone leader will now take bolder and far-reaching decisions in order to inject back life in stagnating euro zone economy.
While investors will keenly wait for the ECB next course of action, the spotlight will also remain on the Federal Reserve. Following contraction in manufacturing activities, consumer price index dropping and fall in housing starts, most Wall Street economists keep view that some sort of monetary easing might be in offing.
The Federal Reserve is expected to hold an annual symposium at Jackson Hole, Wyoming on August 31; and until then both volume and volatility are expected to remain low.
Commenting over relationship between gold’s prices and possible monetary easing, Nick Trevethan, a senior commodity strategist at ANZ in Singapore, said to Reuters, “The market is still moving on changing expectations of central bank actions, and is so far unwilling to push prices out of the $1,590 to $1,630 range.”
Spot gold inched up 0.2% to $1,617.66 an ounce early on Friday. U.S. gold futures for December contract inched lower 0.04% to $1,616.40 an ounce.
Silver futures also fell 0.06% from the previous close to $28.195 an ounce.
