Interests rates have been publicized both in the U.S and the U.K, the deadline to trigger Article 50 is to commence the 29th of March, and important European elections have taken place. How does all this affect gold prices & the pound?

Interest rates

The US Federal Reserve has announced the interest rates will be hiked by 0.25% and with the possibility of three increases throughout 2017. The Key short-term interest rate will now range from 0.75%-1%. There is also the possibility of three further increases in 2018. We saw gold prices drop by 2% last December on the run up to the interest rate hike. However, it has been predicted that once the dust has settled, gold prices will rally with a gradual increase.

The Bank of England are to keep the Interest rates in the UK as they are. This is amidst concerns of an emerging split on how to handle the rise of inflation. Several members during the latest policy meeting felt that the current 0.25% base rate was convenient to support the economy after the referendum. With the UK inflation exceeding the 2% target this may cause the Bank of England to reconsider their decision.

European Elections

The controversial Geert Wilders gained a degree of popularity during his campaign to become the next Dutch Prime Minister. As many predicted though, his popularity would not amount to an actual victory. It is apparent the effect he has had on the country will not be forgotten easily. Having lost out to Mark Rutte, leader of the People’s Party for Freedom and Democracy, Wilders commented on how Rutte has not seen the last of him. The outcome of the Dutch general election may offer some indication as to what might happen in the first round of votes for the French presidential election. These are to take place on the 23^rd of April.

Brexit Update

The Article 50 bill has now been passed through the House of Lords, with royal assent from HM Queen Elizabeth. Theresa May is itching to get the process started, aiming for a deadline near the end of March. We recently saw the pound take a hit at the prospect of a second Scottish independence referendum. Concerns have waned with recent claims that the UK government will reject the proposal. Whether Nicola Sturgeon may use this to her advantage to create a demand for a Scottish independence referendum is yet to be seen.

With all that is going on, gold prices are harder than ever to predict. You can track the gold price on our live charts here to see how the world events are affecting the prices. Another good page to bookmark is our best value bullion page which gives you a great selection of items that give you move for less.