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Precious Metals Profit from ECB Stimulus

June 5, 2014 at 17:29 by Vladimir Vyun

Gold and other precious metals rallied today, taking advantage of the drop of other commodities, after the European Central Bank expanded its monetary stimulus. The ECB cut all of its interest rates and actually started to charge for deposits, reducing the deposit rate to -0.1 percent. The central bank also announced a range of measure for stimulating the struggling European economy, including targeted lending.

Most commodities reacted negatively to the news, and the Standard & Poor’s GSCI index of raw materials dropped 0.4 percent. Precious metals rallied in the meantime, profiting from the risk aversion created by the ECB announcement. Gold jumped 1.1 percent intraday, demonstrating the biggest rally since May 14.

August futures for delivery of gold advanced $9.80 (0.79 percent) to $1,254.10 per troy ounce as of 17:21 GMT on COMEX today. July contract for silver jumped as much as $0.30 (1.59 percent) to $19.09 per ounce. Spot price for platinum rose $4.22 (0.29 percent) to $1,442.60 per ounce, while palladium gained $2.55 (0.30 percent) to $839.25 per ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

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