Gold drops as ECB cuts rates, expands bond-buying

Gold fell on Thursday after the European Central Bank cut interest rates and expanded its bond-buying programme to boost growth and inflation in the euro zone, sending the euro tumbling against the dollar and lifting European shares.

While the resulting strength in the dollar weighed on spot prices, euro-denominated gold rose 1.4% as the single currency slid a full cent against the US unit.

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Spot gold hit a low of $1,237.06 an ounce and was down 0.2% at $1,249.95 an ounce. US gold futures for April delivery were down $6.20 an ounce at $1,252.20.

 

Traders are now awaiting comments from ECB chief Mario Draghi at his post-meeting press conference.

"Our ECB watchers are hoping he'll shed some more light on the measures that have just been announced, and then we will see where that will lead," Commerzbank analyst Daniel Briesemann said.

"Gold in dollar terms has definitely been driven down by the much firmer US currency, and gold in euro terms is supported by the same factor."