Brexit, Trump worries push gold

Published Jan 17, 2017

Share

London - Gold jumped more than 1 percent to its highest in nearly

eight weeks on Tuesday, as excerpts of a speech to be given later by Britain's prime

minister pointed to a definitive exit from the European Union. 

Safe-haven

assets such as gold, the Japanese yen and US Treasuries benefited as investors

sought refuge from the uncertainty of what a "hard Brexit" would mean

for global markets. 

Spot gold

rose 1.1 percent to $1 216.11 per ounce by 1054 GMT, near highs last seen on

November 23.

US gold

futures were up 1.3 percent at $1 211.80 per ounce. The dollar, against a

basket of major currencies, fell 0.3 percent. 

"It's

the uncertainty on Brexit that has created the risk-off environment which has

benefited gold," said Societe Generale Head of Metals Research Robin

Bhar. 

"No

one knows what it really means coming out of the single market, the customs

union and allowing free movement. These are factors whose impact we are not

going to see for some time."   

Gold is

often seen as an alternative investment during times of geopolitical and

financial uncertainty while riskier assets such as stocks are hit. 

According

to a speech setting out Prime Minister May's Brexit priorities, Britain will

not seek an exit deal that leaves it "half in, half out" of the

European Union.  

The dollar

slid after comments by President-elect Donald Trump that the greenback was

"too strong" and on prevailing uncertainty on his plans for the US

economy after his inauguration on Friday. 

Trump's

campaign calls for tax cuts and more infrastructure spending have boosted US shares

and the dollar, as well as driving a selloff in Treasuries, but his

protectionist statements and a flurry of off-the-cuff Tweets have kept many investors

from adding to risky positions, instead opting for gold. 

Investor

interest in gold was indicated as holdings of the largest physically-backed

ETF, New York's SPDR Trust, on Friday rose for the first time since November 9,

the day after Trump's election victory.  

Credit

Suisse said in a note it remained "constructive" on gold prices,

forecasting an average of $1,338/oz in 2017. 

Spot silver

was up 1.7 percent at $17.05 an ounce, to its highest level since December 14.

Platinum scaled two-month highs, climbing 0.8 percent to $988.49. Palladium

added 0.9 percent at $750.38. 

REUTERS

Related Topics: