Gold futures traded volatile on Friday on the back major economic
events such as FOMC minutes release, ECB president speech and China rate
cuts.The euro tumbled, after comments from officials both the euro
zone. The euro currency quotes at $1.2434, down 0.85% on Thursday and
the
US dollar index quotes at 88.16, up 0.52% on Thursday.
European
Central Bank President Mario Draghi sent a strong signal Friday that
the central bank is ready to step up the pressure and expand its
asset-purchase programs if inflation fails to show signs of quickly
returning to the ECB's target.
We will continue to meet our
responsibility--we will do what we must to raise inflation and inflation
expectations as fast as possible, as our price stability mandate
requires of us, Mr. Draghi said in a speech to a banking conference.
If
on its current trajectory our policy is not effective enough to achieve
this, or further risks to the inflation outlook materialize, we would
step up the pressure and broaden even more the channels through which we
intervene, by altering accordingly the size, pace and composition of
our purchases, Mr. Draghi said. Annual euro zone inflation was 0.4% last
month, far below the ECB's target of just below 2%.
In response
to both a slowing domestic and global economy, the People's Bank of
China, the country's central bank, has cut benchmark interest rates in
the world's second-largest economy. It has cut the one-year deposit rate
by 25 basis points to 2.75 per cent and the one-year lending rate by 40
basis points to 5.6 per cent. The rate will be effective from Saturday.
The central bank said it was also giving banks more freedom to set
their interest rates, raising the ceiling for deposit rates to 1.2 times
the benchmark rate from 1.1 times.
The minutes of the US Federal
Reserve's last policy meeting released Wednesday showed that the Fed
decided not to alter its wording on the timing of any interest rate
increases. Fed officials worried that a change could be misinterpreted
by financial markets. In last week of October, the Fed voted to end its
asset purchase program, by a 9-1 vote, and repeated that rates are
likely to stay near zero for “a considerable time,” adding further that
the first move to raise rates could come sooner if the economy is
stronger than expected.
The
COMEX Gold December delivery quotes at
$1,195.50, up $4.60 a troy ounce and Silver December delivery quotes at
$16.263, up $0.126 a troy ounce. The
MCX Gold December delivery quotes
at Rs 26470, up Rs 7 and Silver December delivery quotes at Rs 35996, up
Rs 180 per 1 kg. Indian rupee gained strengthened against the US dollar
on Friday with the currency quotes at Rs 61.756, down 0.22% on Friday.
