PRECIOUS-Brexit worries push gold to highest in over 7 weeks by Reuters | Tuesday
January 17, 2017 07:00
* Silver hits over 1-mth
high of $16.98
* Platinum marks over 2-mth peak of $991.70
Jan 17 Gold prices hit their highest in
more than seven weeks on Tuesday, boosted by safe-haven
buying ahead of a speech in which British Prime Minister
Theresa May is expected to discuss plans for a "hard
Spot gold had risen 0.8 percent to $1,212.40
per ounce by 0605 GMT, its highest since Nov. 23.
U.S. gold futures were up 1.3 percent at
$1,211.80 per ounce.
"Gold is going to do very well in the
first half of the year due to Brexit concerns, Chinese currency
pressure and uncertainty surrounding Donald Trump's policies,"
said Richard Xu, fund manager at China's biggest gold exchange-traded
fund, HuaAn Gold.
"Stock valuations are pretty high and
bonds are not going to perform much better than what they
are doing now. There are very few alternatives for liquidity
to go to and gold prices will find some support," Xu
Britain will not seek a Brexit deal that
leaves it "half in, half out" of the European
Union, Prime Minister May will say on Tuesday, according
to her office, in a speech setting out her 12 priorities
for upcoming divorce talks with the bloc.
"With more currency uncertainty lying
ahead after Prime-Minister's May speech on Tuesday and with
the European Central Bank also meeting on Thursday and likely
staying dovish despite pressure on it to tighten, we think
gold still has more room to move higher," said INTL
FCStone analyst Edward Meir.\
Markets will also look to President-elect
Trump and his plans for the U.S. economy after his inauguration
A trade war between the United States and
China, as well as a strengthening dollar are among the biggest
threats to a brightening global economic outlook, according
to leading economists at the World Economic Forum in Davos.
Trump's campaign calls for tax cuts and
more infrastructure spending have boosted U.S. shares and
the dollar, as well as driving a selloff in Treasuries,
but his protectionist statements and a flurry of off-the-cuff
Tweets have kept many investors from adding to risky positions,
instead opting for gold.
"We see that $1,250 is not far away,
but it is not going to rise above $1,300 as monetary policies
are not going to be accommodative for gold prices to appreciate
in a much bigger way," said Xu of HuaAn Gold.
Investor interest in gold was indicated
as holdings of the largest physically-backed ETF, New York's
SPDR Trust, on Friday rose for the first time since Nov.
9, the day after Trump's election victory.
Spot silver was up 1 percent at $16.94 an
ounce on Tuesday.
Platinum climbed 0.8 percent to $988.35,
while palladium was firm at $744.65.
(Reporting by Nallur Sethuraman in Bengaluru;
Editing by Sonali Paul and Joseph Radford)