Gold prices slightly gained on Wednesday, where cautious trading continued to dominate markets ahead of the European Central Bank’s meeting on Thursday, where the ECB is widely expected to cut the benchmark interest rates by 25 basis points to 1.00%. Moreover, investors were careful ahead of the EU summit on Friday amid hopes EU leaders will announce strong measures to ease the euro zone debt crisis.
Traders will continue to monitor the developments from Europe regarding the debt crisis, where the focus will turn to the ECB decision on interest rates and the conference that will follow the decision, as investors will be eyeing remarks by the ECB Chairman Mario Draghi and whether the ECB will loosen its monetary policy further in the future.
Accordingly, we still expect volatility to continue to dominate gold prices over the course of this week, as investors will be also eyeing the EU summit on Friday. But overall, we could witness more gains for gold over the short term.