Gold retreats as dollar ticks up ahead of European Central Bank meeting

Gold retreats as dollar ticks up ahead of European Central Bank meeting

The European Central Bank (ECB) held interest rates and asset purchases steady on Thursday, amid speculation that the bank will start to scale back its ultra-loose monetary policy in the fall.

ANALYST TAKE: "Investors will be carefully listening to European Central Bank head Mario Draghi at his policy update press conference this afternoon for any indication (explicit or implicit) as to the timing he expects tapering to begin", said Mike van Dulken at Accendo Markets.

Separately, post Asian hours, the European Central Bank's meeting will be in the spotlight. In recent sessions, the shared currency climbed to a 14-month high above $1.15. In the year to June, it was only 1.3 percent.

"Until we get any reform or repeal of Obamacare, the USA will not put through changes to taxation policy".

That was enough to spark a recovery in the euro after early losses while the USA dollar index .dxy fell to the lowest in 11 months, lifting gold prices.

The ECB, the chief monetary authority for the countries that use the euro currency, left its interest rate benchmark unchanged at zero and left untouched the language of its policy statement, in which it said it could even increase the purchases, if needed.

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"Traders may have found that Draghi's comments were less dovish than anticipated, despite his emphasis on the continued need for significant stimulus and on subdued underlying inflation". Germany's DAX gained 0.7 percent to 12,534.

They came just weeks after the ECB's monthly policy meeting in which it dropped its reference to future rate cuts but insisted that interest rates could be expected to "remain at present levels for an extended period of time". While the figures may provide some upside for the Dollar, property sector data having been considered a barometer on the U.S economy and consumer sentiment of late, the figures are unlikely to have any bearing on monetary policy, leaving the Dollar with plenty of ground to make up through the 2 half of the year.

Mario Draghi sent the euro jumping and sparked a selloff in eurozone government bonds, driving yields higher, at a speech in Portugal last month in which he argued that deflationary pressures had been replaced by reflationary ones.

Anglo-Dutch conglomerate Unilever rose 1.7 percent after reporting slightly weaker than expected quarterly sales, but reaffirmed it was sticking to its full-year target.

In the fiscal 2019, inflation is forecast to be 2.3 percent instead 2.4 percent. There was some good news for May in United Kingdom retail data released this morning that showed a rebound of 0.6 percent in June, ahead of forecasts, as warming temperatures boosted clothing sales.

GBP Weakens on Brexit Talk Roadblock as French Claim; "We Want Our Money Back " French Finance Minister Bruno Le Maire has evoked the spirit of Margaret Thatcher after telling the United Kingdom "we want our money back" in the European Parliament.

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