LONDON – 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. UK 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 US 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% to $1 212.90/oz by 1:38 p.m. in London, according to Bloomberg generic pricing. Prices reached the highest since Nov. 22.
Gold has rallied 5.7% this year, extending an 8.1% gain in 2016.
May gave her most explicit outline yet of her vision of Britain post-Brexit and how she wants to get there, saying that the UK 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 ten peers, fell 0.9% on Tuesday, and has lost 1.4% this year. Holdings in exchange-traded funds backed rose 2.5 metric tons on Friday, the biggest jump since November 9.
The start of the year is usually a positive one for gold. In the past decade, the metal has risen every January in all but three years.
Edited by: Bloomberg
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