The prices of gold rose on Friday as clues to more monetary stimulus by the ECB weighed on the euro and European shares pushed up 2.5 percent, denting appetite for alternative investments, while crude oil recovered.
On the Comex, gold for February delivery traded in a tight range between $1,094.50 and $1,103.10 an ounce before settling at 1,098, down 0.20 or 0.02% on the session.
Spot gold was down 0.5 per cent at $1,096.20 an ounce.
One day after striking the ECB could adopt measures additional stimulus when it convenes in March, ECB President Mario Draghi reiterated that the central bank has enough tools at their disposal for the purpose of help increase inflationary pressures throughout the area. Speaking at the WEF in Davos, Switzerland, Draghi also said the ECB would be ready to act if current economic conditions persist.
Draghi offered moderate comments on whether of further increases in interest rates in the short term on Thursday, after the Governing Council of the ECB kept its benchmark rate steady at the record-low of 0.05%. The ECB also maintained its deposit rate unchanged at 0.3% less, a month after cutting further into negative territory by 10 basis points.
Draghi comments, lifted the dollar 0.4 per cent against the euro and prompted a rally in beleaguered stock markets.
Also in the framework of the Davos conference, Chinese Vice President Li Yuanchao stressed that the PBOC will continue to intervene in equity markets when such efforts to help reduce volatility are required. The Shanghai Composite Index has fallen more than 15% this year as the Chinese economy trudges along at the slowest pace in a quarter century. In exclusive statements to Bloomberg, Yuanchao also insisted that the People’s Bank of China has no intention to devalue the yuan.
“Fluctuations in the currency market are the result of market forces, and the Chinese government has no intention or policy to devalue its currency,” Yuanchao said.
MCX gold, with a gain of 0.2 per cent is trading around Rs 26 225.
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