Comex Gold Modestly Lower in Wake of Draghi Press Conference, and as Outside Markets Turn Bearish
By Jim Wyckoff
Comex gold futures prices traded both sides of unchanged in the immediate aftermath of the European Central Bank meeting and press conference by ECB President Mario Draghi. However, gold prices have backed down to trade modestly lower in mid-morning dealings Thursday. A firming U.S. dollar index and weaker crude oil prices are helping to pressure the metals. The ECB left its key interest rates unchanged. At the ECB press conference following Thursday’s meeting, Draghi refrained from announcing a fresh monetary stimulus plan for the European Union. However, Draghi did hint that such a plan is coming down the pike. Most commodity market bulls, including the precious metals bulls, were a bit disappointed that no specific plans were announced by the ECB, or by the U.S. Federal Reserve after its FOMC meeting Wednesday. But the upshot of the ECB and Fed meetings this week is that it appears quantitative easing measures by the U.S. and EU are coming soon.
Such would be at least initially bullish for the precious metals. Reasons: Any fresh influx of money pumped into the major world economies would work to stimulate consumer demand, and it would also raise the specter of price inflation.