Gold turned lower on Thursday, pulling back after having touched a high at $1140.80, as the euro may face further selling pressure as the European Central Bank’s kept the interest rates steady at 1% record low.

British annual consumer price inflation will likely jump to more than 3% in January due to temporary factors, but will fall back below the 2% target over the two-year target period, the Bank of England said in its latest quarterly inflation report on Wednesday.

The BoE kept the interest rate unchanged at 0.5% and the Asset Purchase Facility program at 200 billion pounds in December as expected as claiming that there are increasing signs of economic recovery which are emerging recently, though the economy remained in recession for the third quarter.

Ahead of the British elections that must take place by June; the Labor government on Wednesday has declared its agenda addressing top economic issues.

The Bank of England on Wednesday boosted its forecasts for growth and inflation but still sees subdued price pressures and a slow recovery as the economy limps out of its deepest recession in decades.

In his speech, Bernanke warned “as the global economy recovers and trade volumes rebound, however, global imbalances may reassert themselves.”

Hesitation is taking place in financial markets on another calm day; supported by two fundamentals, which are to be released later on this week, with the Bank of England’s Minutes scheduled to be released tomorrow, along with the FOMC monthly decision. The minutes will justify tomorrow; why the bank decided to hold rates at 0.50%, the lowest since the banks establishment, along to holding on the 175 billion pounds quantitative easing strategy.

In currencies, Sterling was heavily sold across the board as concerns over UK economic conditions. Some analysts referred to cable as a new funding currency, citing recent depreciation against the high-yielding commodity FX after monetary authorities left the door open for further interest rate cuts.

The pound gained- in the Asian session -for the first time in three days against the other majors after a U.K. report today showed more surveyors reported a gain in British home values than a drop for the first time in two years. The number of U.K. respondents saying prices rose in August exceeded those reporting declines by 11 percentage points, the first positive reading since July 2007.