Gold and Silver Up Thanks to ECB’s Draghi Use Of Negative Interest Rates

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The spot gold and silver price rebounded overnight with the recent announcement from European Central Bank President Mario Draghi to bring deposit rates into the negative territory. The ECB is cutting its main refinancing rate, bringing down rates to 0.15 percent from 0.25 percent and lowered its overnight deposit rate to -0.1 percent from 0 percent.

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The idea is to boost credit creation in the private sector by forcing banks to lend more money as keeping money with the central bank now will be penalized by paying an interest rate. European investors are putting their money into the precious metals to gain a return they can no longer reap by putting it into banks.

Japanese silver saw the biggest upwards shift for the day, rising 1.5 percent to close at JPY 627.00 ($6.11) per 10 grams on Monday, June 9. US silver gained 0.4 percent to finish at $19.11 per ounce. Chinese silver closed 0.4 percent lower at CNY 4,070 ($651.88) per kilogram. After a 0.2 percent increase, Indian silver finished the day at INR 40,213 ($682.14) per kilogram.

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Japanese gold bullion prices inched up 0.4 percent to JPY 4,132 ($40.26) per gram. At CNY 251.79 ($40.33) per gram, Chinese gold bullion fell 0.3 percent yesterday. The price of Indian gold bullion declined 0.1 percent to INR 25,854 ($438.57) per 10 grams. At $1,253 per ounce, the price of US gold bullion was essentially unchanged.

The price of Japanese platinum bar increased 1.3 percent to JPY 4,788 ($46.65) per gram. Chinese platinum bar rose 1.0 percent to CNY 310.00 ($49.65) per gram. This marked the fifth day in a row of increasing prices and the improvement has accelerated since Tuesday, June 3. Following a two-day rise, the price of US platinum bar flattened at $1,441.

The price of Chinese palladium bar nudged up 0.5 percent yesterday, closing at CNY 189.00 ($30.27) per gram. US palladium bar saw its price rise 0.4 percent to $839.00 per ounce. The price of Japanese palladium bar hit JPY 2,761 ($26.90) per gram, reaching a 30-day high after a 0.1 percent jump.

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