Brexit Plus Trump Equals Winning Streak for Gold During Januaryby and
Prices are up 6% in 2017, reaching highest since November
Start of the year is usually positive for bullion investors
If you think the new year is a time of optimism and hope for the future, then you haven’t been watching gold.
Bullion has risen every day except one in 2017, evidence that investors are pricing in a rocky year ahead. U.K. Prime Minister Theresa May confirmed Tuesday that she’ll leave the European Union’s single market while seeking a new arrangement on the customs union. Donald Trump is just three days away from being sworn in as the next U.S. president.
“As the inauguration of Trump draws close, I think people are realizing that potentially this could be a very stormy presidency and gold may well benefit from that,” said David Govett, an analyst at Marex Spectron Group Ltd. in London. “There is new money at the beginning of each year looking for a home and a lot of this seems to find its way into gold.”
Gold for immediate delivery rose 0.9 percent to $1,214.09 an ounce at 1:56 p.m. in New York, according to Bloomberg generic pricing. Prices reached the highest since Nov. 22. Gold futures for February delivery added 1.4 percent to settle at $1,212.90.
Gold has rallied about 6 percent this year, extending an 8.1 percent gain in 2016.
May gave her most explicit outline of her vision of Britain post-Brexit and how she wants to get there, saying that the U.K. parliament will get a vote on the final deal.
Bullion’s advance has been buttressed by a retreat in the dollar’s rally, as well as signs of increased demand. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 peers, fell 0.9 percent on Tuesday, and has lost 1.7 percent this year. Holdings in exchange-traded funds backed by gold rose 2.5 metric tons on Friday, the biggest jump since Nov. 9.
In other market news:
- Spot silver climbed 1.9 percent to $17.1307 an ounce.
- Palladium rose 0.9 percent, while platinum fell 0.9 percent.