Gold Prices In Pounds and Euros Gain More as Economic Growth Falters in the UK and EU

Gold prices broke over €1,160 (EUR) and £1,020 (GBP) per ounce mark yesterday following more poor economic data out of the EU and the UK.  The British pound has again come under selling pressure due to Brexit uncertainty and the very poor UK economic data has made matters worse.

The UK economy plunged into reverse in December, with a broad based slump in economic output which completed the weakest year for growth since 2012. The Office for National Statistics (ONS) said gross domestic product (GDP) contracted by 0.4% from the previous month, driven by a fall in spending on the high street over the key festive shopping period.

Yesterday, gold denominated in euros climbed to the highest since early May, 2017, at €1,164.65 euros per ounce. Numbers from EU countries have consistently disappointed and the Euro-area growth forecast is for it to slow to just above 1% this year. The EU and the UK are two of a growing number of “weak links” in the global economy.

UK and Irish demand for gold remains robust due to the political and economic uncertainty across Europe. Uncertainty regarding Brexit, Italy and the outlook for the EU is fueling demand.

In dollars, gold rose to its highest since late April after the Fed kept interest rates steady. The likelihood of looser monetary policies by the Fed and other central banks in the coming months will support gold and should lead to higher prices.