Gold Futures Decline as ECB Cuts Interest Rate

Gold futures fell on Thursday in reaction to moves of the ECB and the Bank of England which created worries for global economy.  The European Central Bank announced reduction in the key interest rate while the Bank of England opted for further easing measures. Though the move of European Central Bank was highly anticipated by traders still it affected the gold price. Moreover, the People’s Bank of China also announced to reduce its interest rate and decided for more relaxed monetary rules.

According to many analysts the moves by Central banks created concerns over the growth of global economy.

Gold futures contract for August delivery slipped 0.8 percent or $12.40 to settle at $1,609.40 per ounce on the Comex division of the New York Mercantile Exchange. The precious metal also saw pressure due to stronger greenback. The dollar index DXY which tracks the US dollar’s performance versus its six major rival counterparts gained to 82.809 on Thursday as compared to 82.132 on Wednesday’s late trading hours. Gold always moves opposite to direction of the greenback as the stronger dollar makes the precious metal expensive for investors with foreign currencies.

Among other metals, silver futures contract for September delivery also fell 2.2 percent or $0.61 to settle at $27.65 per ounce while copper futures for the same month dropped 1.3 percent or $0.05 to settle at $3.49 per pound.

Platinum futures for October delivery slipped 0.9 percent or $13.70 to $1,477.70 per ounce while palladium for September plunged 2.2 percent or $13.15 to settle at $585.75 per ounce.

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