The gold price rebounded after the ECB issued a new stimulus proposal. We are seeing an interesting challenge between the risk on scenario, which is dominating the markets and it is overall negative for bullion, and the hyper expansive monetary policies from central banks, which are supportive for the bullion price.
Technically, after a new test to the support zone at $1,700, the spot price rebounded up to $1,720. It is clear that investors are betting that the ECB’s dovish decisions, which follow similar moves by the Fed and the BoJ, will remain in place for a long time and will potentially even be increased in the next few months as well as being followed by other central banks introducing similar policies.
