Gold price somewhat weaker ahead of ECB meeting

Gold fell by $10 yesterday on the back of higher risk appetite among market participants and a firmer US currency, and this morning is trading only just above the $1,130 per troy ounce mark. In euro terms, gold remains virtually unchanged at €1,010 per troy ounce. Market participants will doubtless be focusing their attention on the ECB's meeting today. It will be particularly interesting to see the ECB's assessment of the latest developments on the financial markets and how it will react to them.

Given the unfavorable inflation outlook - the rate of inflation in the Eurozone is still well below the ECB's long-term 2% goal and long-term inflation expectations have declined again of late - ECB President Draghi may threaten to top up or extend the bond purchasing programme in an attempt to verbally weaken the euro. This could give the gold price in euros a boost, says Commerzbank.