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EU reaches budget agreement for next 7 years

The President of the European Council, Herman Van Rompuy, announced Friday that the 27 members of the European Union have reached agreement on the EU budget framework for the next seven years.

"Deal done! #euco has agreed on #MFF for the rest of the decade. Worth waiting for", wrote Van Rompuy on his twitter account, in reference to the nearly 28 hours spent in the negotiations.

Van Rompuy's proposal raises the expenditure ceiling to €960 billion, €13 billion less than his previous proposal. The 2014-2020 budget agreement involves a €34 billion cut from current budget cycle, set at €994 billion. Analysts interpreted the agreement as a victory for the United Kingdom and net contributors to the EU budget.

Even though the deal is done, the EU budget is not official yet, not until the European Parliament gives its approval.

While Rajoy welcomed the deal and said it is beneficial for Spain, German Chancellor Angela Merkel said budget deal combines growth and consolidation and it is a good sign for investors. She said all 27 members backed budget agreement.

Gold trading at $1667.79

Gold prices remain entrenched within the recently traded range, with a near-term tone now being aligned towards the downside. According to Slobodan Drvenica an analyst at Windsor Brokers Ltd., “Yesterday’s price action culminated in a repeated failure at the range top / base of daily kumo at 1684, with the revised range floor at 1666 being cracked, which we see as a sign that the downside is more vulnerable.”
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