Comments made by the president of the European Central Bank on Thursday suggest that ECB monetary policy will continue to be supportive of strong gold process.
Speaking after a policy meeting, Christine Lagarde noted that economic health could be described as mixed. Although the ECB recognised that there was some positive sentiment for the economy, meaning that the level of uncertainty has lowered it was also mindful of ongoing risk factors.
She said, “The risks surrounding the euro area growth outlook, related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets, remain tilted to the downside, but have become less pronounced as some of the uncertainty surrounding international trade is receding.
“The trade agreement between U.S. and China has slightly reduced uncertainty but impact on net basis for the euro area needs to be assessed.”
The key area of interest for gold prices is contained within comments about monetary policy, with Lagarde confirming that the European Central Bank will continue on its current path – a path which favours gold prices. She added, “In the light of the continued subdued inflation outlook, monetary policy has to remain highly accommodative for a prolonged period of time to support underlying inflation pressures and headline inflation developments over the medium term.”
Investment experts advise that loose monetary policy in the hopes of boosting inflation is great for gold prices – meaning you can buy now with confidence.