LONDON/SINGAPORE (BLOOMBERG) - 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 on Tuesday (Jan 17) 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 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 per cent to US$1,214.09 an ounce at 1:56pm in New York on Tuesday, according to Bloomberg generic pricing. Prices reached the highest since Nov 22. Gold futures for February delivery added 1.4 per cent to settle at US$1,212.90.
Gold has rallied about 6 per cent this year, extending an 8.1 per cent 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 UK parliament will get a vote on the final deal.
Bullion's advance has been buttressed by a retreat in the US 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 per cent on Tuesday, and has lost 1.7 per cent this year. Holdings in exchange-traded funds backed by gold rose 2.5 metric tons on Friday, the biggest jump since Nov 9.
Spot silver climbed 1.9 per cent to US$17.1307 an ounce. Palladium rose 0.9 per cent, while platinum fell 0.9 per cent.