We can pop the corks on our Champagne bottles and celebrate the heroic work of the government and the BoE, who have finally managed to tame inflation to a rate beneath their 2% target.
The reduction of inflation now offers the BoE a clear path to reduce interest rates further. Gold, as a non-yielding asset, becomes more attractive when interest rates fall.
Lower interest rates generally weaken a currency. If sterling weakens, gold priced in GBP naturally becomes more expensive.
While inflation is cooling, the monetary environment is shifting towards easier conditions, which historically has supported gold prices.
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