Moderate gains for precious metals

The rallying stock and European bond markets did take away some shine

Bullion prices ended the U.S. day session with moderate price gains on Thursday, 22 January 2015. Safe-haven buying interest was featured in the aftermath of the European Central Bank's move to implement quantitative easing of its monetary policy. The QE package was more aggressive than market expected, which added some uncertainty to the market place Thursday.

February gold posted a modest gains with Feb gold rising $8.20 to $1301.50/oz.

March silver gained $0.17 to $18.36/oz.

Prior to the U.S. open, ECB President Mario Draghi revealed plans to purchase investment-grade corporate and government debt in the amount of EUR60 billion per month. According to Mr. Draghi, the program will continue through September 2016 and will be deployed 'decentrally,' meaning national central banks will participate in the risk sharing. When asked about the program's limits, Mr. Draghi said the take-up is limited to 25.0% of a given issue. The announcement boosted European debt (Italy 10-yr yield -14 bps to 1.55%) and weighed on the euro, sending the single currency lower by nearly 300 pips to 1.1340 against the dollar.

European bond markets rallied on the news, as did European and U.S. stock indexes. The rallying stock and European bond markets did take away some buying interest from the gold market.

The next big news event for the markets will be this weekend's much-anticipated Greek elections, which could determine if that country remains a member of the European Union.

U.S. economic data out Thursday included the weekly jobless claims report, the monthly house price index, the weekly DOE liquid energy stocks report, and the Kansas City Fed manufacturing survey. Those reports were overshadowed by the ECB news.

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