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Gold prices holding firm against euro as ECB leaves interest rates unchanged

Gold prices remain firm against the euro as the European Central Bank left interest rates unchanged and said that it remains confident that it can bring inflation down to its 2% target.

Thursday, in a highly anticipated move the ECB left the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 4.50%, 4.75% and 4.00% respectively.

Although inflation remains stubbornly high, the ECB said that they are making progress in bringing consumer prices down.

“Inflation is still expected to stay too high for too long, and domestic price pressures remain strong. At the same time, inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease. The Governing Council’s past interest rate increases continue to be transmitted forcefully into financing conditions. This is increasingly dampening demand and thereby helps push down inflation,” the ECB said in its monetary policy decision.

The gold market is not seeing much reaction to the ECB’s latest monetary policy announcement. Spot gold last traded at €1,884.20 an ounce, up nearly 1% on the day.

Gold continues to outperform the euro compared to the U.S. dollar. Spot gold against the greenback last traded at $1,985.90 an ounce, up 0.57% on the day.

Source: Kitco