Precious metals and gold ETFs slumped last week following disappointment over the European Central Bank’s “whatever it takes” disappointment.

The ECB’s “whatever it takes” to solve the Eurozone debt crisis pledge turned out to be “not much” for precious metals. [Gold ETFs Pare Weekly Loss After Jobs Report]

While the risk of the FOMC doing nothing ahead of the US jobs data last Friday had already largely been incorporated into expectations, the market was certainly more disappointed by ECB President Mario Draghi’s press conference, after suggesting that the ECB will do whatever it takes to preserve the Euro.

ECB President Draghi seemed to suggest that the ECB would intervene in debt markets, if governments were prepared to seek funding from the EFSF and adhere to their austerity commitments.

Lack of clarity

The problem remains that details of the ECB’s potential intervention remain a mystery, similar to the lack of clarity that has clouded the bailout mechanism for Spain and its banking sector.

With so much uncertainty, it is no wonder financial markets responded negatively, with gold losing 2% following the ECB press conference and silver dropping as much as 3.5% from the week’s high point.

While there appeared to be a lack of decisiveness in central bank policy last week, the clear message from all three of the guardians of the world’s major reserve currencies is that if fundamentals do not improve quickly, more monetary easing and unconventional policies are coming.

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