The
prospect of unprecedented European stimulus that sent gold prices to
the biggest gain in three weeks still wasn��t enough to rescue bullion
from the doldrums of sinking volatility.
The
European Central Bank became the first major central bank to take one
of its main rates negative as President Mario Draghi unveiled historic
measures to fight deflation. Gold rose more than 40 percent since the
end of 2008 as policy makers printed money at a record pace to boost
expansion. Futures gained less than 1 percent today.
Bullion��s
60-day historical volatility is at the lowest since April 2013, and the
value of exchange-traded funds backed by gold shrank by $2.6 billion in
May, the most this year. The metal��s appeal as a haven diminished as
U.S. equities surged and tension between Ukraine and Russia eased. More
than $1.1 trillion was added to the value of global stock markets last
month.
Gold
futures for August delivery rose 0.7 percent to $1,253.30 an ounce at
1:40 p.m. on the Comex in New York, the biggest gain since May 14.
Prices climbed 4.2 percent in 2014.
The
ECB today cut its deposit rate to minus 0.1 percent. Draghi said the
ECB will introduce new, œtargeted offerings of liquidity to banks to
encourage them to lend.
Source : Bloomberg
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