LONDON: Gold prices turned higher on Thursday after the Bank of England cut interest rates for the first time since 2009, though gains were muted by strength in the dollar after the previous day’s upbeat US jobs data.
Spot was up 0.4 per cent at $1,362.60 an ounce at 1350 GMT, off an earlier low of $1,348.50, while US futures for December delivery were up $4.30 an ounce at $1,369.00
In addition to the cut in rates to a record low 0.25pc, the BoE said it would buy 60 billion pounds of government debt to ease the blow from Britain’s vote to leave the European Union. Gold is highly sensitive to falling interest rates, which cut the opportunity cost of holding non-yielding bullion.
“The revision in expectations for monetary policy in the US, Japan, the euro zone and the UK has played a big role in the rise in the gold price so far this year, and we expect it to continue,” Capital Economics analyst Simona Gambarini said.