Gold Trades Flat Ahead Of ECB Announcement

 | May 08, 2014 07:20AM ET

Gold is quiet in Thursday trade, after sharp losses a day earlier. In the European session, the spot price stands at $1291.96. Federal Reserve chair Janet Yellen will continues her congressional tour, as she speaks before the Senate Budget Committee later in the day. On the release front, today's highlight is Unemployment Claims. The markets are expecting a strong improvement after last week's poor showing.

Gold prices slipped on Wednesday as concerns over the crisis in the Ukraine eased. Russian President Vladimir Putin surprised observers when he urged pro-Russian separatists to postpone their referendum on independence. Putin claimed that Russia had withdrawn its forces from the Ukraine border, although there was no confirmation from NATO. The situation is likely to remain volatile, as elections in Ukraine scheduled for the end of May remain in jeopardy.

Federal Reserve Chair testified before Congress' Economic Joint Committee on Wednesday, and gave a cautious thumbs-up to the economic recovery. She said that the economy has improved, but pointed to two sore spots - the job market remains weak and inflation is below the Fed's target of 2%. Yellen stated that she therefore expects that low interest rate levels will continue for a "considerable time". Yellen has stated previously that slack remains in the economy, and the Fed is expected to proceed carefully with future trims to its QE scheme. Since December, the Fed has trimmed the asset-purchase program by almost half, cutting it to $45 billion each month.