Gold Holds Steady Over £1,000 – Increased Likelihood Of A Disorderly Brexit
– Gold supported near $1,300/oz ahead of important British Brexit no-confidence vote
– Gold is consolidating in range between $1,280 and $1,300/oz (over £1,000/oz and €1,100/oz) – A break of resistance at $1,300 will likely see gold rise rapidly in all currencies
– Physical demand for gold coins and bars has picked up in the UK and Ireland, aided by Brexit uncertainty
| Gold is holding steady today supported by a very tentative recovery in equities. Bullion should be supported as caution deepens ahead of a no-confidence vote on British Prime Minister Theresa May’s government and other geopolitical risks including the US government shutdown loom large in investors minds.
Physical demand for gold coins and bars has picked up in the UK and Ireland, due to Brexit and UK political uncertainty. British opposition Labour Party leader Jeremy Corbyn called a vote of no confidence in the UK government, to be held at 1900 GMT today, after May’s Brexit deal was defeated by lawmakers on yesterday. A Jeremy Corbyn government would not be good for the pound and would benefit gold in sterling terms. The date set for Britain’s departure from the European Union is March 29, but as the deadline approaches quickly, markets are hoping that there will be an extension. The increased likelihood of a disorderly Brexit and the extension of a U.S. government shutdown have helped keep gold which is well supported near a more than six-month high of $1,300 per ounce. |
Gold in GBP Source: GoldCore.com - Click to enlarge |
| Most stock markets globally have stabilised after strong volatility and sharp falls at the end of last year. Rightly or wrongly they are taking much comfort from the resumption of China-U.S. trade talks.
The likelihood that the Fed will slow or indeed stop its interest rate hikes is also making gold increasingly attractive to investors. |
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