Gold Falls After Central Bank’s Surprise Move

The  gold price continued to fall overnight after the Bank of England, contrary to expectations, kept interest rates unchanged at yesterday’s meeting.

The market had earlier priced in an over 80 percent chance of a 25-basis point cut in the July meeting, though some had reckoned that the BoE may prefer to wait till August when more data will be available to assess the impact from the Brexit decision.

Gold prices have rallied more than 25% since the beginning of 2016, but is the rally now over, or would it be foolish not to buy gold?

Brexit isn't the only market upset to affect the gold price, with interest rates and currency changes impacting demand

To help answer that question let’s take a look at what has driven the gold price higher in 2016.

One of the key drivers continues to be interest rates.

Demand for gold typically climbs when interest rates are low. Although gold has no yield, it tends to offer investors a better place to park their money when returns from bonds and cash savings are poor – as they are when rates are low.

At the end of last year, it seemed the tide was turning, with the US Federal Reserve increasing rates for the first time in seven years. But the Fed folded on a rate rise in June and expectations for further hikes this year have receded.

Meanwhile, the Bank of England this week dashed expectations that it would slash rates below 0.5pc over fears Brexit could plunge the economy into recession.

An article in The Telegraph looks at this and the 4 other key forces driving the rally in gold.

You can read the full article here 

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Gold and Silver Bullion – News and Prices

Gold slips, on track for first weekly decline since May (Reuters)

Gold Heads for First Weekly Loss Since May as Haven Allure Fades (Bloomberg)

Gold marks 5th loss in six sessions (MarketWatch)

Nice terror attack: Lorry driver kills 84 during rampage at Bastille Day celebrations (Telegraph)

Selling spree: Price spike dulls gold’s luster for Indian buyers (Reuters)

The Fundamental Reason The Silver Price Will Explode Much Higher Than Gold (Silverseek.com)

Could Italy Bring Down The Euro? (Zerohedge)

The Bull Market You Haven’t Seen (Bloomberg)

Gold Prices (LBMA AM)

15 July: USD 1,330.50, EUR 1,194.789 & GBP 994.150 per ounce
14 July: USD 1,325.705, EUR 1,192.99 & GBP 1,001.96 per ounce
13 July: USD 1,340.25, EUR 1,211.45 & GBP 1,009.74 per ounce
12 July: USD 1,352.85, EUR 1,217.84 & GBP 1,029.11 per ounce
11 July: USD 1,358.25, EUR 1,231.66 & GBP 1,059.95 per ounce
08 July: USD 1,356.10, EUR 1,224.83 & GBP 1,047.45 per ounce
07 July: USD 1,367.10, EUR 1,233.40 & GBP 1,052.80 per ounce

Silver Prices (LBMA)

15 July: USD 20.14, EUR 18.08 & GBP 15.06 per ounce
14 July: USD 20.25, EUR 18.23 & GBP 15.15 per ounce
13 July: USD 20.29, EUR 18.31 & GBP 15.25 per ounce
12 July: USD 20.35, EUR 18.35 & GBP 15.47 per ounce
11 July: USD 20.47, EUR 18.53 & GBP 15.78 per ounce
08 July: USD 19.72, EUR 17.82 & GBP 15.20 per ounce
07 July: USD 19.95, EUR 18.00 & GBP 15.31 per ounce


Recent Market Updates

– “We Are On the Cusp of an Explosion in the Silver Price” – John Embry
– Stocks Rally – Is Brexit Systemic Risks Contained?
– Britain has a new prime minister – here’s what that means for you
– Metals Caught Between Global Gloom, U.S. Job Gains as Gold Slips
– Central Bank Resumes Monthly Gold Buying in Bid to Diversify Reserves
– Property Fund Turmoil in the UK has Eerie Echoes of Bear Stearns
– “In Gold We Trust” Annual Report – New Bull Market “Emerging”
– 3 Charts Show “How Precious Brexit Is” for Gold and Silver Bullion
– Gold, Silver Best Performing Assets In H1, 2016 – Up 26% & 38%
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED

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