Pound, gold and oil prices in focus: commodity and currency check, 23 December

Updated Mon, Dec 23, 2024, 3:16 AM 4 min read

Pound (GBPUSD=X)

The pound was flat against the dollar in early European trading on Monday, trading at $1.2566. This comes as revised figures showed that the UK economy failed to grow in the third quarter.

The Office for National Statistics has revised its estimate of gross domestic product (GDP) growth for the three months of July to September down to 0%, from 0.1%.

The data showed that there was no growth in the services sector in the latest quarter, while a 0.7% rise in construction was offset by a 0.4% fall in production.

Early estimates showed that real GDP per head fell by 0.2% in the third quarter and that there was no growth in real households' disposable income.

Meanwhile, the household saving ratio was estimated to have declined to 10.1%, compared with 10.3% in the second quarter.

These revised figures compared to estimated GDP growth of 0.4% in the second quarter and 0.7% in the first quarter.

Liz McKeown, director of economic statistics for the ONS, said: "The economy was weaker in the second and third quarters of this year than our initial estimates suggested with bars and restaurants, legal firms and advertising, in particular, performing less well.

"The household saving ratio fell a little in the latest period, though remains relatively high by historic standards. Meanwhile real household disposable income per head showed no growth."

Meanwhile, sterling rose slightly against the euro (GBPEUR=X), up nearly 0.2% to trade at €1.2079.

Gold (GC=F)

Gold prices were little changed on Monday morning, eased back after having risen following cooler US inflation data, which reignited hopes of further monetary policy easing.

The spot gold price rose nearly 0.3% to $2,629.84 per ounce on Monday, while gold futures were flat at $2,644 per ounce.

The latest reading of the personal consumption expenditures (PCE) index on Friday, which is the Federal Reserve's preferred inflation gauge, rose by a lower-than-expected 2.4% year-on-year in November.

Prior to this data release, gold prices fell last week after the Fed signalled a slower pace of rate cuts in 2025. Lower interest rates are positive for gold as a non-yielding asset.

According to Reuters, Ajay Kedia, director at Kedia Commodities, Mumbai, said: "We are entering the holiday mode and gold's mainly been helped by short-covering, which started on Friday itself and there is some technical support as well."