Gold struggles against the British pound after Bank of England cuts rates reiterates careful gradual stances on monetary policy

The gold market is losing ground against the British pound after the Bank of England cut its Bank rate but continued to strike a cautious tone in its monetary policy statement.

As expected, the BOE cut its Bank Rate by 25 basis points to 4.25%. The decision was slightly less than decisive as it was passed with a vote of 7 for and two against; economists were forecasting unanimous support.

While the central bank continues to loosen its monetary policy, analysts were expecting the committee to strike a more dovish tone to signal further easing through the summer.

However, the committee reiterated its gradual and careful monetary policy stance.

“Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate. The Committee will continue to monitor closely the risks of inflation persistence and what the evidence may reveal about the balance between aggregate supply and demand in the economy. Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further,” the central bank said in its monetary policy statement.

Gold is struggling to attract some bullish attention following the BoE’s monetary policy decision. In the global spot market, gold last traded at £2,509.60 an ounce, down almost 1% on the day.

Gold’s weakness in the UK is also reflected in the broader market. Spot gold against the US dollar last traded at $3,336.60 an ounce, down 0.73% on the day.