The UK interest rate decision was released on Thursday at the conclusion of the December 18 meeting, with the Bank of England cutting interest rates by around 25 basis points to a range of 3.75%, the lowest level since December 2022, in line with market expectations, marking the fourth step of British monetary easing this year.

Oil prices were steady on Thursday, as investors weighed the possibility of additional US sanctions on Russia alongside supply risks stemming from a blockade of Venezuelan oil tankers.

Brent crude slipped by one cent to $59.67 a barrel by 11:33 GMT, while US West Texas Intermediate crude rose by five cents to $55.99 a barrel.

John Evans, an analyst at PVM, said that US intentions to impose further sanctions on Russia, along with threats to block sanctioned tankers carrying Venezuelan oil, helped support prices.

Bloomberg reported on Wednesday, citing people familiar with the matter, that the United States is preparing a new round of sanctions on Russia’s energy sector if Moscow does not agree to a peace deal with Ukraine. However, a White House official told Reuters that President Donald Trump has not made any decisions regarding sanctions on Russia.

Analysts at ING said in a note that any additional measures targeting Russian oil could pose a greater risk to market supplies than Trump’s announcement on Tuesday of a potential US blockade of sanctioned tankers entering or leaving Venezuela.

In the same context, the European Union imposed sanctions on Thursday on 41 additional vessels from Russia’s so-called “shadow fleet,” bringing the total number of sanctioned ships to around 600.

Britain also imposed sanctions on 24 individuals and entities under its Russia sanctions regime, including Russian oil companies such as Tatneft and Russneft, according to a government notice issued on Thursday.

According to ING, a blockade of Venezuela could affect about 600,000 barrels per day of Venezuelan oil exports, most of which are destined for China, while exports of around 160,000 barrels per day to the United States are likely to continue. The bank noted that Chevron tankers are still sailing to the United States under a previous authorization from the US government.

At the same time, most other Venezuelan exports remained halted on Wednesday, although state oil company PDVSA resumed loading shipments of crude and fuel after operations were suspended due to a cyberattack, according to sources and customs data.

It remains unclear how any US blockade would be enforced. The US Coast Guard took an unprecedented step last week by seizing a Venezuelan oil tanker, and sources said the United States is preparing to carry out further similar interceptions.

Venezuelan oil accounts for about 1% of global oil supply.

The dollar recorded a modest rise against major currencies on Thursday, as markets positioned ahead of central bank decisions in the UK, Europe, and Japan.

Sterling remained under pressure after a sharp and unexpected drop in UK inflation data, which reinforced expectations of an interest rate cut by the Bank of England. In contrast, the Japanese yen pared some of the losses seen in the previous session, supported by expectations that the Bank of Japan will raise interest rates on Friday to their highest level in three decades.

The dollar largely ignored comments from US President Donald Trump, who said the next Federal Reserve chair would strongly believe in cutting interest rates.

The dollar index, which measures the US currency against a basket of peers including the yen and the euro, rose by 0.2% to 98.55 points, after posting a similar gain in the previous session.

The yen slipped by 0.1% to ¥155.85 per dollar, extending a 0.6% decline recorded on Wednesday.

The euro fell by 0.2% to $1.1718, while sterling edged slightly lower to $1.3348, following a 0.4% drop in the previous session.

Interest rate futures markets moved to price in nearly a 100% probability that the Bank of England will cut rates by 25 basis points on Thursday, following weaker-than-expected UK inflation data for November. By contrast, the European Central Bank is widely expected to leave interest rates unchanged at its meeting on Thursday, while signaling limited appetite for rate cuts in the near term.

Mohammad Al-Sarraf, analyst at Danske Bank, said: “We do not expect any new monetary policy signals from the ECB, and we find it difficult to imagine the central bank raising interest rates in 2026, or even 2027.”

He added: “However, a rate cut from the Bank of England now seems all but certain, and we are likely to see further weakness in sterling after the announcement.”

Both the Swedish central bank and the Norwegian central bank kept their key interest rates unchanged on Thursday, in line with expectations. The Swedish krona was steady at 10.899 per euro, while the Norwegian krone edged slightly higher to 11.955 per euro.

In Asia, the Bank of Japan appears poised to raise its short-term interest rate from 0.5% to 0.75%, as rising food costs keep inflation above the bank’s 2% target.

According to Vincent Chung, Fixed Income Portfolio Manager at T Rowe Price in Hong Kong, the Bank of Japan could raise interest rates twice in 2026 in an effort to address persistently negative real interest rates.

Chung said: “There are some expectations that the Bank of Japan may not adopt a hawkish tone in its forward guidance, which could lead to some weakness in the yen, but we believe any such weakness would be temporary.”

In the United States, uncertainty remains over the timing of the Federal Reserve’s next interest rate cut, as well as over the central bank’s ability to maintain its independence, amid Trump’s remarks about a potential successor to Fed Chair Jerome Powell, whose term ends in May.

Federal Reserve Governor Christopher Waller said on Wednesday that the US central bank still has room to cut interest rates as signs of labor market weakness increase. His comments contrasted with those of Atlanta Fed President Raphael Bostic, who said on Tuesday that he did not believe last week’s rate cut by the Fed was justified.

Trump, who has expressed a desire to play a role in Federal Reserve decision-making, said in a White House broadcast that he would soon announce his nominee to succeed Powell.

“I will soon announce our next Federal Reserve chair, someone who believes in cutting interest rates, and by a lot, and mortgage payments will fall further,” Trump said.

All known candidates — White House economic adviser Kevin Hassett, former Fed Governor Kevin Warsh, and Christopher Waller — support the view that interest rates should be lower than current levels, although none has suggested cutting rates to the extent advocated by Trump.

Gold prices retreated in the European market on Thursday, moving into negative territory under pressure from the continued recovery of the US dollar against a basket of major global currencies, ahead of the release of key US inflation data.

Those data are expected to provide strong clues about the future path of Federal Reserve monetary policy in 2026, especially as markets currently price in two US interest rate cuts next year.

Price Overview

Gold prices today: Gold prices fell by around 0.4% to $4,322.23, from an opening level of $4,338.37, after recording an intraday high at $4,343.31.

At Wednesday’s settlement, gold prices rose by 0.8%, resuming gains that had paused the previous day amid correction and profit-taking activity from a two-month high at $4,353.59 per ounce.

US Dollar

The US Dollar Index rose by 0.2% on Thursday, maintaining gains for a second consecutive session, reflecting the continued recovery of the US currency against a basket of global currencies.

This positive performance comes ahead of central bank decisions in Europe and the UK, where European interest rates are expected to remain unchanged, while UK rates are seen being cut by around 25 basis points.

US Interest Rates

Federal Reserve Governor Christopher Waller said the central bank still has room to cut interest rates amid a cooling labor market.

US President Donald Trump said the new Federal Reserve chair will believe in significantly lower interest rates.

Following these comments, CME FedWatch pricing showed that expectations for keeping US interest rates unchanged at the January 2026 meeting declined from 80% to 72%, while expectations for a 25 basis point rate cut rose from 20% to 28%.

Investors are currently pricing in two US interest rate cuts next year, while the Federal Reserve’s own projections point to a single 25 basis point cut.

US Inflation Data

To reassess these expectations, traders are awaiting the release of key US inflation data for November later today, which are expected to influence the Federal Reserve’s monetary policy path in 2026.

Gold Outlook

Kelvin Wong, Market Analyst for Asia Pacific at OANDA, said that Waller’s comments suggest the Federal Reserve may maintain the current rate-cut cycle, which supports both gold and silver at present. Wong added that some profit-taking could emerge at current levels.

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, increased by about 0.85 metric tons on Wednesday, lifting total holdings to 1,052.54 metric tons.