Gold Futures Extend Losing Streak To 5th Session

Gold prices settled lower on Thursday, extending recent losses, despite the U.S. Federal Reserve’s assurance that it would continue with its liberal monetary policy stance to support the economy which is down due to the ongoing coronavirus pandemic.

The Federal Reserve on Wednesday vowed to continue with its aggressive policy stance until it is comfortable that the economy is back on its feet.

The Fed’s emergency credit facilities are “wide open” and “we can do more of that,” Fed Chair Jerome Powell said in a press conference.

Gold prices slipped despite a weak dollar. The dollar index was down more than 0.5% at 99.03 around mid afternoon.

Gold futures for June ended down $19.20, or about 1.1%, at $1,694.20 an ounce. However, gold futures gained about 6.1% in the month.

Silver futures for July declined $0.342, or 2.2%, to $14.973 an ounce, while Copper futures for July eased by about 1.1% to $2.3440 per pound. Silver futures and Copper gained about 5.8% and 5.2%, respectively in the month of May.

The European Central Bank which left the key interest rate unchanged at record low zero as expected, strengthened its liquidity supportive measures as the currency bloc contracted at the sharpest pace since 1995 as most of the member states introduced coronavirus containment measures.

The Governing Council of the ECB decided to ease the conditions on the targeted longer-term refinancing operations, or TLTRO. The bank lowered the interest rate on TLTRO operations to 50 basis points below the average interest rate.

In order to support liquidity conditions, a new series of non-targeted pandemic emergency longer-term refinancing operations, or PELTRO, will be conducted from May 2020.

Further, the ECB will continue its EUR 750 billion new pandemic emergency purchase programme in a flexible manner over time, across asset classes and among jurisdictions.

Moreover, net purchases under the asset purchase programme will continue at a monthly pace of EUR 20 billion, together with the purchases under the additional EUR 120 billion temporary envelope until the end of the year.

The council said it is fully prepared to increase the quantitative easing.

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