Gold Prices Sink To 2-Week Low As Brexit-UK Gets No Rate Cut Or New QE From BOE

GOLD PRICES fell to 2-week lows against all major currencies bar the Japanese Yen in London trade Thursday as the Bank of England surprised the markets by holding UK interest rates and its QE bond-buying scheme unchanged in response to late-June’s Brexit result in the referendum on leaving the European Union.

Falling to $1322 per ounce as Western stock markets rose once again, gold priced in Dollars has now lost almost 4% from Monday’s new 2-year high.

Gold had already fixed at its lowest Yuan price since 1 July at Shanghai’s afternoon benchmarking auction, with Swiss refinery MKS’s Asian desk reporting strong “selling interest [also] during early London trade.”

Silver was firmer once more, slipping only a little below last week’s finish to hold at $20.12 per ounce as New York trading began.

The Bank of England’s monetary policy committee defied analysts and market expectations with only 1 member of the 9-person team – economist and former bond strategist Gertjan Vlieghe – voting to cut rates from their current 0.5%, already the lowest ever rate since the Bank opened more than 3 centuries ago.

Sterling jumped to touch 2-week highs on the forex market, but then eased back as traders read the accompanying statement and 11 pages of minutes from yesterday’s meeting, concluded before new UK finance minister Philip Hammond was announced by prime minister Theresa May, herself only moving into No.10 Downing Street on Wednesday.

“Were the Bank going to do more quantitative easing,” notes SkyNews economics reporter Ed Conway, “it would have needed the Chancellor‘s approval…[but] at the time there was no Chancellor.”

“Most members of the Committee expect monetary policy to be loosened in August,” the Bank of England says.

“The precise size and nature of any stimulatory measures will be determined during…August.”