US and European stocks responded favorably Thursday morning to the European Central Banks announcement outlining the details of a continent wide public bond buying program. Mario Drahgi, President of the ECB, outlined several goals of the program including: reaching an inflation target at or just below 2% continent wide, a reduction of labor market slack, and increasing European competitiveness worldwide.
The bond buying program, which is set to begin 09 March 2015, will purchase approximately €60 billion worth of public debt and asset backed securities per month until at least May of 2016. Investors received the news positively as US stocks all rose during early morning trading and Euro stocks surged to 7 year highs, despite grumblings from the Bundesbank. The German government, the lone naysayer of European quantitative easing, worries that inflationary measures will encourage spendthrift nations to delay structural economic reforms. However, not even the whims of Europe’s most powerful economy (Germany) could prevent the stroke of Draghi’s pen.
Factors Affecting Gold
It would seem as though precious metals investors are rather indifferent about the recent ECB announcement, as gold, silver, and platinum traded marginally higher during the morning hours.
In the week to come, it will be important to note any developments in Europe next week, following the February employment report set to be released by the Bureau of Labor Statistics on Friday.