Gold futures were on track to mark a second consecutive gain Thursday after the European Central Bank cut eurozone interest rates and delivered a batch of measures intended to boost the region’s sluggish economy — bullish moves for bullion.
The ECB cut its deposit rate further into negative territory, decreasing it by 10 basis points to negative 0.5%, while also announcing it would restart its monthly bond-buying program as it attempts to juice inflation and European expansion.
“Gold certainly welcomed the ECB stimulus,” said Craig Erlam, a senior market analyst at Oanda. “Ultimately, global easing like we’re seeing now has been bullish for gold and that’s exactly what we’re seeing right now.”
December gold GCZ19, +0.90% on Comex gained $21 an ounce, or 1.4%, at $1,524.20 an ounce, after rising 0.3% on Wednesday. Silver for December delivery SIZ19, +0.28%, meanwhile, added 17.5 cents, or 1%, at $18.345 an ounce, after giving up less than 0.1% a day ago.
“Central banks around the world have been easing, and will continue to do so, and that’s why gold has been making such strides higher with only modest corrections along the way,” Erlam said in a market update.
A rally for gold comes as the U.S. dollar briefly scored a post-ECB gain then weakened, and U.S. stock indexes traded on a mixed note.
Expectations that the U.S. Federal Reserve may be influenced by the ECB helped to drive bond yields lower, offering support for bullion, which doesn’t offer a yield. The 10-year Treasury note yield TMUBMUSD10Y, -0.15% was down 2 basis points to 1.7153% Thursday from 1.733% late Wednesday.
Policy measures implemented by the ECB come ahead of the Fed’s monetary policy gathering, where the central bank is widely expected to cut U.S. interest rates by 25 basis points on Sept. 18.
Reductions to global interest rates and some $17 trillion dollars in government debt that offers a negative yield have helped to bolster appetite for alternatives assets like gold, considered a haven during times of economic uncertainty.
Trading for precious metals also comes as President Donald Trump said late Wednesday that the U.S. would delay implementing fresh tariffs until Oct. 15 on $250 billion in China goods that were due to take effect on Oct. 1.
Trump’s action was taken by the market as a reflection of softening tariff tensions amid the Sino-American trade clash and comes ahead of a new round of negotiations between the world’s superpowers to resolve the conflict that is set to take place at an unspecified date in early October.
Other metals traded on Comex moved higher, with the exception of copper, which saw its December contract HGZ19, +0.27% fall by 1.5 cents, or 0.6%, to $2.599 a pound. October platinum PLV19, +1.36% traded at $951 an ounce, up $10.60, or 1.1%, while December palladium PAZ19, +2.47% added $37.10, or 2.4%, to $1,593.90 an ounce.
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