MW: Gold futures retreat as dollar gains after ECB
By Sarah Turner, MarketWatch
NEW YORK (MarketWatch) — Gold futures fell back on Thursday as the dollar shot higher against the euro as investors took in comments from European Central Bank President Mario Draghi at a press conference.
Gold futures for delivery in April GCJ3 +0.03% dropped $10.40 to $1,668.30 an ounce in electronic trading.
The contract had risen $5.30, or 0.3%, to $1,678.80 an ounce on the Comex division of the New York Mercantile Exchange Wednesday, buoyed by weakness in U.S equities.
The ECB left its key lending rate Thursday unchanged at a record low 0.75% as expected. The euro EURUSD -0.8598% went from $1.3540 to $1.3420 as ECB President Mario Draghi said the central bank was watching the rise in the euro for an impact on inflation. Read: Draghi: Watching euro rise for inflation impact
HSBC strategists had been predicting ahead of the meeting that if Draghi offered no resistance to euro gains, the markets might push the single currency higher against the dollar.
Central-bank action in Japan may also support gold, HSBC believes, if the Bank of Japan pursues an even-looser monetary policy.
This week, Bank of Japan Gov. Masaaki Shirakawa said he would step down from his post on March 19, a few weeks ahead of the end of his term, to coincide with the departure of two deputy governors. Analysts said the news likely means an accelerated and potentially more wide-ranging policy-easing plan will emerge from the Japanese central bank.
“Bullion is historically sensitive to global monetary policy stimulus and expectation of further accommodations by the BoJ is gold positive, we believe,” the HSBC analysts said Thursday.
Silver futures for delivery in March SIH3 -0.30% declined 43 cents to $31.45 an ounce and March copper futures HGH3 -0.48% traded flat at $3.75 a pound.
April platinum PLJ3 +0.26% fell $3.80 to $1,732.80 an ounce, while March palladium PAH3 +0.03% futures fell $1.75 to $763.40 an ounce.
Sarah Turner is MarketWatch's bureau chief in Sydney. Follow her on Twitter @SarahTurnerMKTW.
