Gold surges to highest level in over a month
10 Jan 2017
Gold rose to its highest level in over a month today as the dollar slid on jitters ahead of a scheduled news conference by US president-elect Donald Trump on Wednesday and on the UK's uncertain exit from the EU.
According to commentators, the market wanted to know more about Trump's spending plans in the first speech since his shock win in November, which pushed the dollar lower.
The pound and stocks also retreated on fears of a "hard" Brexit after UK Prime Minister Theresa May said at the weekend she was not interested in the UK keeping "bits" of its EU membership.
Gold often considered an alternative investment during times of geopolitical and financial uncertainty, benefited from the subdued market sentiment.
Spot gold rose to its highest since 5 December to $1,187.61 an ounce and was up 0.2 per cent at $1,183.61 an ounce by 1030 GMT.
According to ABN AMRO commodity strategist Georgette Boele, the combination of a soft dollar, lower US yields and risk aversion created a supportive environment for gold.
"We have this Trump conference coming up tomorrow and the market seems to be a bit nervous ahead of it," Boele said, adding that this sentiment would be short-lived as US interest rates were expected to rise at least three times, denting gold, Reuters reported.
Meanwhile, in India, gold prices crossed the Rs29,000 mark with a Rs330 jump to Rs29,030 per 10 grams with the uptrend in the global bullion market.
According to bullion traders, there was an uptrend in the gold market globally as it was considered to be a better alternate given that the dollar registered weakness in trade lately.
The move was also pushed by an increased demand in local spot market.
According to commentators, gold usually showed negative correlation with stock market movement.
However, today it joined other indices, which was an uncommon phenomenon, indicating that investors were showing confidence in bullion as well when global equities were trending higher.
