Gold bounced from near six-year lows on Thursday in line with a sharp rebound in the euro, rising 1 percent after the European Central Bank (ECB) announced the minimum cut in its deposit rate that investors had been expecting. The ECB cut its deposit rate to -0.30 percent from -0.20 percent, but left its main refinancing rate, which determines the cost of borrowing for banks at the ECB's weekly auction, unchanged at 0.05.
The cut was smaller than some traders had expected, leading to a 3 percent rebound in the euro against the dollar. "Every article I read and everyone I spoke to (ahead of the announcement) was thinking of a rate cut," said Afshin Nabavi, head of trading at MKS. "When they left (the main refinancing) rate unchanged, the market was rather shocked."
Spot gold was up 1.1 percent at $1,064.71 per ounce at 3:22 pm EST (2022 GMT), after falling to its lowest since February 2010 at $1,045.85 an ounce. Earlier weakness came from Federal Reserve Chair Janet Yellen's comment on Wednesday that shored up expectations for a US gold futures for February delivery settled up 0.7 percent at $1,061.20. Silver was up 0.7 percent to $14.12, after hitting its lowest since August 2009 at $13.79 an ounce. Platinum was up 1.3 percent at $841.49 an ounce, after touching a seven-year low of $819.75, while palladium was up 2.5 percent at $537.61 an ounce after touching a three-month low at $521.72.
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