Gold and other metals are trading down on Thursday following the ECB interest rate decision and Mario Draghi press conference. Euro reacted positive, sending the dollar down, but gold wasn’t able to take advantage of that.
What happened? Gold always likes when central banks consider more stimulus, but this time, ECB and Mario Draghi seems to be diminishing returns to certain policies in the near future.
ECB gives more talking but no decisions yet
On Thursday, ECB President Mario Draghi talked about the possibility of more easing package in September, but gold investors wanted more from the central banker.
So, even though Euro is trading positive, sending the dollar index down, gold is not taking advantage of that because Draghi’s words were not enough.
According to experts, the focus will now focus on the Federal Reserve Interest rate decision next week. However, recent firm economic data in the United States is putting rate cut speculations into consideration.
Euro is the king of the day; Dollar index down
Euro is trading positive after the ECB president Mario Draghi press conference, pushing the Dollar index down. However, gold is not taking profit the situation, and it is also trading down to fresh intra-day lows.
The dollar index, on the other hand, is trading down on Thursday with the unit testing the 97.50 area.
Gold down on the day, but the move is limited
Gold is trading negative on Thursday after the ECB rate decision. However, the unit remains inside the range between 1,414 and 1,430 it has been trading since July 22.
Currently, XAU/USD is moving at 1,420, 0.06% negative on the day. Technical conditions are mixed.
The unit looks supported by the 20-day moving average at 1,414, and a break below that level would be a very bad sign for the short term. Below there, supports come at 1,400 and 1,380.
To the upside, the unit needs a break above the upper side of the range. Then, it will test the 1,440 and 1,460 areas.
Silver down after three positive days after rejecting 16.60
Silver is trading negative for the first time in the last four sessions as the unit rejected the 16.60 area on Wednesday and today.
After peaking 16.65, the highest level since June 15, 2018, XAG/USD started to fall, and it returned below the 16.50 level before testing the 16.40 support.
Silver is currently trading 0.75% negative on the day at 16.47. Technical conditions suggest a consolidation phase in the short term as the unit is overbought, but the 16.20 is acting as a reliable support.
To the upside, 16.60 is the immediate resistance. Next levels to watch are 16.80 and 17.30.