Euro to remain weak on cautious ECB, weighing further on XAUUSD – Commerzbank

The inflation figures for the eurozone in June will be published tomorrow. The European Central Bank (ECB) could leave the euro under downside pressure – weighing on gold as well – if sticks to hike just by 25 basis points (bps) at its next meeting, strategists at Commerzbank report.

ECB risks falling further behind other central banks

“We will be interested to see whether the ECB will rethink its stance if the inflation rate turns out to be higher than expected and whether it will consider raising interest rates by more than 25 bps at its next meeting on 21 July after all.”

“On just 25 bps rate hike, the ECB risks falling further behind other central banks that have already hiked their interest rates considerably. In this case, the euro would presumably remain weak, which would weigh further on the gold price.”