(Kitco News) - The gold market continues to consolidate at elevated levels in the broader currency market and is seeing little reaction after the Bank of England cut interest rates by 25 basis points.
In a much-anticipated move, the BoE cut its Bank Rate to 3.75% on Thursday following its final monetary policy meeting of 2025. The easing decision was passed by a majority vote of 5–4, in line with expectations.
Gold has seen some modest selling pressure overnight but is holding new support against the British pound, in line with broader market moves. Spot gold last traded at £3,239 an ounce, down 0.17% on the day. By comparison, gold is down 0.29% on the day against the U.S. dollar, trading at $4,325 an ounce.
Many analysts said the BoE had the green light to cut rates, as inflation data released ahead of the meeting came in lower than expected.
“CPI inflation has fallen since the previous meeting, to 3.2%. Although above the 2% target, it is now expected to fall back towards target more quickly in the near term,” the central bank said in its monetary policy statement.
“Monetary policy is being set to ensure CPI inflation settles sustainably at 2% in the medium term, which involves balancing the risks around achieving this. The risk from greater inflation persistence has become somewhat less pronounced since the previous meeting, while the risk to medium-term inflation from weaker demand remains. The extent of further easing in monetary policy will depend on the evolution of the outlook for inflation,” the BoE added.
