15th July 2016

Gold fell to a two-week low on Thursday, dropping almost $25/ounce at one point before paring its losses by the close. Once again, surging global equities pressured the complex, as did improving prospects for sterling. The British currency moved higher on news that the Bank of England decided not to unveil any new easing measures at its monthly meeting. The BoE kept interest rates unchanged and said it might move on a “package of measures” in a few weeks and once it has a chance to assess how the June 23rd vote has affected the economy. Almost one month after Brexit, it is becoming clear that the sector suffering the most so far is UK commercial real estate, but that alone was not enough of a reason for the BoE to act. As a result, sterling soared on the BoE decision, getting to just under $1.35 at one point and also gained 2% against the Euro, reaching a two-week high. Separately, Britain’s new finance chief, Philip Hammond, said his government would do whatever was necessary to restore confidence in the economy and suggested that he would be more amenable to fiscal spending than his predecessor was.