(Kitco News) - The gold market is trading just off its session highs after the Bank of England decided to leave interest rates unchanged following its September monetary policy meeting.
In a much-anticipated move, the BoE said Thursday that it would maintain the Bank Rate at 3.75%. Even the vote breakdown fell in line with expectations, as three committee members voted for a 25-basis-point hike.
The central bank acknowledged persistent inflation pressures. The committee also noted that much of the increase is due to the war in Iran, which has created a significant global energy crisis.
“UK CPI inflation increased to 3.1% in August and is likely to rise further over coming quarters. Monetary policy is being set to ensure inflation comes down to 2% sustainably as the economy adjusts to the energy shock. The policy stance required to achieve this will depend on the scale and duration of the shock and how it propagates through the economy,” the central bank said in its monetary policy statement.
The gold market saw a modest boost in its initial reaction to the BoE’s latest monetary policy decision and is slightly leading the broader market recovery. Spot gold last traded at £3,237.07 an ounce, up 1.58% on the day against the British pound.
The global gold market is seeing a healthy recovery from Wednesday’s selloff after the Federal Reserve raised interest rates by 25 basis points and signaled that it sees one more rate hike by year-end.
Spot gold last traded at $4,325.60 an ounce, up 1.48% on the day.
