Gold rises as ECB cuts interest rates

Gold futures on the COMEX division of the New York Mercantile Exchange registered the largest one-day gain since May 14 Thursday as the European Central Bank (ECB) cut interest rates and introduced a number of easing measures.

The most active gold contract for August delivery rose 9 U.S. dollars, or 0.72 percent, to settle at 1,253.3 dollars per ounce.

ECB President Mario Draghi said after a policy meeting that the ECB decided to cut its main lending rate from 0.25 percent to 0.15 percent, a new low, and cut the rate on bank deposits with the central bank overnight to negative 0.1 percent.

Draghi also announced more easing measures to encourage lending. After Draghi's announcement, the euro began to stumble against dollar, and gold rose as a result.

Market analysts believe that the ECB's easing measures are conducive to gold in the long term, because increases in supply of fiat currencies will raise the relative value of gold.

Other analysts, however, hold different views. Analysts with Societe Generale said Thursday that spot gold is likely to move below 1,200 dollars an ounce in 2015, below 1,000 dollars an ounce in 2016, and further go to an average of 825 dollars between 2017 and 2019 on prospect of U.S. rate hikes.

Silver for July delivery rose 29.1 cents, or 1.55 percent, to close at 19.083 dollars per ounce. Platinum for July delivery climbed 11.2 dollars, or 0.78 percent, to close at 1,445.1 dollars per ounce.