Gold News

ECB hikes European interest rate to 4.0%

The European Central Bank (ECB) raised interest rates by a quarter of a percentage point to 4.0 per cent today (June 6th).

This takes the interest rate in countries that use the euro as their currency to its highest level since before the September 11, 2001 terrorist attacks in New York.

However, it is the press conference that follows today's announcement that will have more of an impact on the wider economy, as ECB president Jean-Claude Trichet will give an indication as to whether rates are likely to increase further.

Trichet is not likely to suggest that 4.0 per cent is the highest the rates will reach in the current cycle, MarketWatch reports.

Analysts believe that, if Trichet does suggest this, it could weigh on the euro against the dollar, and by extension on the price of gold.

The precious metal closed at $670.90 in London yesterday, the Associated Press reports.


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