10 Mar 2016
ECB delivers, but Gold drops
The European Central Bank delivered with interest rate/deposit rate cut, expansion of QE and new TLTRO’s, but Gold is not cheering the move.
Drops to session low
Prices; hovering around $1249 ahead of the rate decision; dropped to $1236/Oz levels even though the single currency took a hit following ECB’s big bazooka announcement. Usually, gold responds positively to increase in central bank stimulus. Hence, the move in gold is somewhat surprising.
A strong USD index; now up 1%; may have weighed over the metal. The focus now is on Draghi’s press conference.
Gold Technical Levels
The immediate hurdle is seen at 1253.32 (Feb 24 high), above which prices could test 1263.36 (Feb 11 high). On the other hand, a break below 1220 (Feb 19 low) would open doors for a drop to 1200 levels.
Drops to session low
Prices; hovering around $1249 ahead of the rate decision; dropped to $1236/Oz levels even though the single currency took a hit following ECB’s big bazooka announcement. Usually, gold responds positively to increase in central bank stimulus. Hence, the move in gold is somewhat surprising.
A strong USD index; now up 1%; may have weighed over the metal. The focus now is on Draghi’s press conference.
Gold Technical Levels
The immediate hurdle is seen at 1253.32 (Feb 24 high), above which prices could test 1263.36 (Feb 11 high). On the other hand, a break below 1220 (Feb 19 low) would open doors for a drop to 1200 levels.