(MENAFN- ProactiveInvestors) Gold could not match the excitement of the previous week even though the ECB finally committed to a €1trn stimulus package for the eurozone.
Unlike the shock decision of the Swiss to end their peg to the euro everyone knew the ECB move was coming.
So though the amount of bonds to be bought by the ECB from the banks each month was slightly higher than expected at €60bn it was close enough to the forecasts for gold to edge down slowly.
The bond programme is initially set to run until September 2016 with the option of extending it if inflation does not rise to 2%.
One immediate consequence was that the euro fell sharply again to US$1.12 against the US dollar and its lowest level in more than 11 years against the US currency.
Gold is the traditional hedge to the dollar (and inflation) and the two assets move counter to each other.
In theory a weaker euro means a higher dollar and lower gold but the problems in Europe have seen the traditional links weaken and also seen a surge in the metal priced in local currencies.
Against the euro it has risen by 17% in 2015 but also seen substantial gains in other currencies.
The euro has also been undercut by the impending election in Greece which is expected to see a victory for the anti-austerity socialist Syriza party.
While few commentators say yet the outlook for gold has changed for definite the advent of quantitative easing (QE) does point to a change in the landscape.
Commerzbank suggested that gold may ease lower after the result is known Sunday but with the euro not showing any signs of recovery and other external influences such as renewed heavy fighting in Ukraine the gold price looks underpinned at least in euro terms.
SPDR Gold Trust the largest of the gold-backed exchange traded funds saw its biggest inflows since August 2012 this week.
Broker RFC Ambrian added that as confidence in fiat currencies is not high and new gold supply has been limited in recent years there are strong fundamentals backing the gold story.
Economics research house Capital Economics also put out one of most bullish forecasts yet for the price this year.
Julian Jessop head of commodities research suggested the price may be above US$1400 by the end of the year.
"The resilience of gold in the face of a surging US currency and collapsing oil price has supported our long-held view that the price of the precious metal will recover further this year and next" he said.
It had predicted US$1300 in 2015 but with the price already at that level it has brought forward its end-2016 forecast of $1400 by a year.
“Looking ahead one big unknown is the market responses to monetary easing by the ECB and to early tightening by the US Fed both of which could be either positive or negative for gold.
“On balance though we expect the backdrop for the precious metal to remain favourable.”
Shortly after trading got underway in the US spot gold was US$1294 up about US$15 on the week.
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