Gold has been rising in price for both Euro and Sterling investors today, even as the London Fix dipped from $622 this morning to $620.50 at 15:00 GMT.
Sterling had earlier regained the six-and-half year highs it hit on a trade-weighted basis on Wednesday, before selling off in thin dealing. Profit-taking knocked the Pound 1.5 cents lower by lunchtime in London to $1.956, despite third quarter UK economic growth being revised up to 2.9% year-on-year – the fastest pace in two years.
"It suggests that the [UK] economy is growing quite well," said Daragh Maher, senior currency strategist at Calyon, taking the government's revision at face value. "But the difficulty for Sterling is that a rate hike in February is pretty much priced in now."
Meantime in the US, economic growth slowed to 2% in the third quarter said Washington today, pulled down by the fastest drop in new home building since 1991. That would suggest no hike in interest rates – or at least no cuts – from the Fed in early 2007. Yet the Dollar has pushed back gold, Sterling and the Euro so far today.
Trade is very thin in all markets, however. "As most players have moved into holiday mode price movements are likely to become more flow driven as Christmas approaches," said one metals strategist in a note today.
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