Gold benefits as Brexit jitters send investors to safe havens

Bengaluru — Gold prices rose on Friday, having hit a one-week high earlier in the session, as investors sought safe-haven assets amid fear of a chaotic departure for Britain from the European Union.

UK Prime Minister Theresa May’s draft Brexit plan ran into dispute after the resignation of key ministers from her government, and eurosceptic legislators stepped up efforts to topple her, provoking fears the country could crash out of the EU without a divorce deal.

“The issues around Brexit have invigorated a little bit of safe-haven buying in the market…. The focus of the market has turned slightly to geopolitical issues at the moment,” said ANZ analyst Daniel Hynes.

Spot gold was up 0.2% at $1,215.07 an ounce at 4.45am GMT. Earlier in the session, bullion hit $1,216.79, its highest since November 9.

US gold futures were flat at $1,215.30/oz.

“Gold should continue to find demand on dips, provided the dollar remains in check,” Stephen Innes, Asia-Pacific trading head at Oanda in Singapore, said in a note.

The dollar index, which measures the greenback against a basket of six major currencies, was at 97, not far from a 16-month high of 97.69 hit at the start of the week.

Innes said political tension, a softer dollar, and the US Federal Reserve triggering some early warning signals about global growth risk in 2019, were seen as positive for the gold market.

Investors also kept an eye on US-China trade tension as they looked for concrete signs that the two economic powers were seeking to de-escalate their dispute.

Spot gold may edge up to $1,223/oz, to complete a bounce triggered by a channel support near $1,192, said Reuters technical analyst Wang Tao.

Among other precious metals, palladium edged 0.3% lower to $1,153.50/oz, having hit a record high of $1,178.30 in the previous session.

Palladium is on track to mark its biggest weekly gain since September 21, having risen more than 3% so far.

Platinum climbed 0.1% to $842.30/oz on Friday and was down about 1% for the week so far.

Silver was little changed at $14.29/oz. It has risen about 1% so far this week.

Reuters