The Luxembourg Times reports that despite ongoing geopolitical uncertainty, it is expected that a decision will be made to lower interest rates at the December 12 meeting of the ECB.
ECB Governing Council member Martin Kazaks states that the European Central Bank should continue to reduce borrowing costs as consumer price growth is nearly under control.
This week, an ECB Governing Council meeting will take place. "In my opinion, we should make a decision to lower interest rates," Kazaks told Latvia's TV3 channel. "We see that the inflation problem will soon be solved, which means we can lower interest rates."
It is expected that this decision will be made at the December 12 meeting, which would be the fourth rate cut since the beginning of the rate reduction cycle in June, but further actions are unclear as geopolitical uncertainty complicates the situation.
"Of course, the uncertainty is very high, we don't know what first steps Donald Trump will take once in office, tariffs could also slow down Europe's economy again, but overall, we see that the European economy is rising from its lowest point," Kazaks said.
Florinus CEO Žilvinas Leškevičius analyzes gold price changes: "In June, after the US Federal Reserve began its cycle of interest rate cuts, the price of gold increased significantly. For example, on the London Bullion Market, the price of 1 Troy ounce in June averaged about 1950–2000 USD, a rise of about 6.3% per month compared to the previous period. In September, the price of gold jumped again as the interest rate cuts reduced bond yields and boosted investments in alternative assets like gold. In September, the price of gold reached a new record, rising more than 3% per week after the rate cut."
"This is crucial information for investors looking to hedge against inflation – interest rate cuts have a positive effect on gold prices. As a result, the price of gold will continue to rise. We will see the same trends as before when interest rates were reduced. Additionally, the LBMA council predicts an increase in gold prices. During this period, when economic conditions encourage the search for stability, investing in gold is not only a safe but also a profitable long-term solution," adds Žilvinas Leškevičius.
