BackGlobal gold prices rise as Brexit worries stoke demand for safe-haven assets
Spot gold prices had risen 0.3% to $1,205.93 per ounce by 8.54am. On Monday, the prices marked their highest in more than seven weeks at $1,207.86
Premium
Bengaluru: Gold prices rose on Tuesday to hover near seven-week highs hit the day before, with safe-haven demand boosted ahead of a speech in which British Prime Minister Theresa May is expected to discuss plans for a “hard Brexit".
Spot gold had risen 0.3% to $1,205.93 per ounce by 8.54am. On Monday, it marked its highest in more than seven weeks at $1,207.86.
US gold futures were up 0.8 percent at $1,205.50 per ounce.
“Gold is going to do very well in the first half of the year due to Brexit concerns, Chinese currency pressure and uncertainty surrounding Donald Trump’s policies," said Richard Xu, fund manager at China’s biggest gold exchange-traded fund, HuaAn Gold.
“Stock valuations are pretty high and bonds are not going to perform much better than what they are doing now. There are very few alternatives for liquidity to go to and gold prices will find some support," Xu added.
Britain will not seek a Brexit deal that leaves it “half in, half out" of the European Union, Prime Minister Theresa May will say on Tuesday, according to her office, in a speech setting out her 12 priorities for upcoming divorce talks with the bloc.
Markets will also look to President-elect Trump and his plans for the US economy after his inauguration on Friday.
A trade war between the United States and China and a strengthening dollar are among the biggest threats to a brightening global economic outlook, according to leading economists at the World Economic Forum in Davos.
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.
“We see that $1,250 as not far away, but it is not going to rise above $1,300 as monetary policies are not going to be accommodative for gold prices to appreciate in a much bigger way," Xu said.
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 9 November, the day after Trump’s election victory.
Spot silver was up 0.3% at $16.84 an ounce on Tuesday. Platinum climbed 0.3% to $984, while palladium fell 0.2% to $742.73. Reuters
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
