Gold Price Losing Ground Against Pound As BOE Surprises With No Rate Cut

London (July 14)  In Currency markets, gold is seeing its biggest losses against the British pound as the Bank of England surprised markets and kept interest rates unchanged at 0.5% Thursday.

In the first monetary policy meeting since the nation voted in a referendum to leave the European Union, the central bank said that it will wait until August to announce new stimulus measures, when it will have updated forecasts regarding the state of the British economy.

"The precise size and nature of any stimulatory measures will be determined during the August forecast and Inflation Report round," it said in its statement Thursday.

As for the impact the Brexit vote has had on the country, the bank said that despite a 6% decline in the pound, financial markets have been resilient.

Markets have functioned well, and the improved resilience of the core of the UK financial system and the flexibility of the regulatory framework have allowed the impact of the referendum result to be dampened rather than amplified,” the bank said.

Kitco.com’s gold currency markets shows that the yellow metal continues to lose ground in currency markets as investors digest the news. Gold prices are down 1.99% against the British pound, last trading at £988.79 an ounce.

While gold may be seeing its biggest losses against the pound today, the metal is still holding significant gains following the Brexit Referendum. Since June 24 gold is up more than 17% aginst the pound.

Gold's losses in Britian is also just part of a bigger theme as the metal is seeing broad-based weaknes. The yellow metal is down amost 2% against the euro, Swiss Franc and Canadian dollar. Gold is down only 1.18% against the U.S. dollar and 0.2% against the Japanese yen.

Source: KitcoNews