Investing.com - Gold prices turned higher on Thursday, as the euro surged against the dollar after European Central Bank President Mario Draghi announced no new QE measures at the conclusion of the ECB's policy-setting meeting.
The euro soared more than 2% against the dollar, while the dollar index, which measures the greenback's strength against a basket of other major currencies, crashed 1.5% to 98.53.
European Central Bank President Mario Draghi made no changes to the size of the central bank's monthly asset purchase program, leaving it at €60 billion.
Earlier in the day, the ECB lowered its deposit facility rate to -0.3% from -0.20%, in line with market expectations. The central bank also left its benchmark interest rate at a record-low 0.05%, matching expectations.
Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $4.50, or 0.45%, to trade at $1,058.30 a troy ounce during U.S. morning hours.
It earlier fell to $1,045.40, a level not seen since February 2010, amid mounting expectations that the Federal Reserve will raise interest rates at its December policy meeting.
Fed Chair Janet Yellen said on Wednesday that the central bank was still on track to hike rates this month, citing "continued improvement in the labor market" and "confidence that inflation will move back to our 2% objective over the medium term."
Yellen will testify about monetary policy before Congress' Joint Economic Committee at 10:00AM ET later Thursday. She is expected to reinforce the view that a December rate hike is likely.
Also looming large is Friday's nonfarm payrolls report, the last jobs report before the Fed decides on interest rates at its December 15-16 meeting. A strong payrolls report was likely to cement expectations for a Fed rate hike later this month.
Gold is down almost 8% since November amid mounting expectations the Fed will raise rates for the first time in nearly a decade at its mid-December meeting. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Meanwhile, silver futures for December delivery inched up 9.6 cents, or 0.69%, to trade at $14.10 a troy ounce. Prices fell to $13.80 earlier in the day, the weakest since August 2009.