Gold rebounded by more than 1 percent on Thursday as the euro bounced back from a six-week low against the dollar after European Central Bank (ECB) chief Mario Draghi indicated that further interest rate cuts in the euro zone are unlikely. Both the single currency and bullion prices had fallen earlier in the day after the ECB reduced interest rates and expanded its bond-buying program in an attempt to boost growth and inflation in the currency bloc.
That sent spot gold to a low of $1,237.06 an ounce, but by 2:46 pm EST (1946 GMT) it had gained 1.4 percent to $1,270.10. US gold futures for April delivery settled up 1.2 percent at $1,272.80. The ECB dropped its main refinancing rate to zero on Thursday, from 0.05 percent, while expanding its quantitative easing asset-buying program to 80 billion euros ($88.7 billion) a month from 60 billion euros and cutting its deposit rate to -0.4 percent from -0.3 percent. That initially sent the euro sharply lower, but the currency recovered to a three-week high against the dollar after Draghi said the bank did not expect that it would be necessary to cut rates further.
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