The three main central banks: the European Central Bank, the Bank of England, and the Federal Reserve have pledged not to raise interest rates and to maintain a collective extremely flexible monetary policy.
All the heads of central banks emphasized that the current level of inflation is temporary.
Last Wednesday, ECB President Christine Lagarde said that they had formulated three conditions for the need to raise rates. But since the inflation forecast is quite restrained in the near future, these three conditions are unlikely to be implemented next year.
The Bank of England has published its latest monetary policy in accordance with the minutes of the Monetary Policy Committee meeting. Their statement was in line with the statements of the Fed and the ECB, in which it was written that the existing monetary policy is acceptable. The MPC voted by a 7:2 majority to keep the bank rate at 0.1%.
The Fed issued a statement following the November meeting on Wednesday, November 3. With regard to the current funds rate, the Fed has maintained the target range from 0 to 1/4 percent.
All three major central banks have reached the same conclusion regarding the continued growth of inflationary pressures. They concluded that raising interest rates at the moment will damage the economic recovery that is currently taking place in Europe, as well as in the United States.
After the statement issued by the European Central Bank, the Bank of England, and the Federal Reserve, gold remained at the same level when all three central banks published their forecasts indicating that none of the central banks will raise rates in an attempt to reduce record levels of inflation.
The reaction began on Thursday, November 4, with a belated reaction when gold futures opened at $1,770 and closed at $1,792.
On Friday, the US Department of Labor released an employment report for October, which said 531,000 Americans were added to the number of jobs outside agriculture, and the unemployment rate fell from 4.8% to 4.6%.
The extremely strong jobs report and the sharp rise in gold prices over the last two days of the previous week indicate that traders and investors are much more focused on the current level of inflation than on the number of additional jobs in the United States.