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Gold Rises to Eight-Week High of $1,200

January 16, 2017 at 18:08 by Andrew Moran

Gold prices have touched above the important $1,200 threshold for the first time in 2017. Due to growing uncertainty regarding US President-Elect Donald Trump, Brexit, and the upcoming European elections, investors are seeking out a safe haven, and that appears to be the yellow metal.

February gold futures climbed $6.30, or 0.53%, to $1,202.50 per ounce at 16:41 GMT on Monday. Gold has not traded at this level in eight weeks. The yellow metal had pared some of its gains as it neared the $1,210 mark earlier in the trading session. This comes as gold recorded its third consecutive weekly gain last week.

Silver is also tacking on the gains to start the trading week. February silver prices rose $0.08, or 0.51%, to $16.85 an ounce. Silver also advanced last week by around 2%.

The gains in gold come days before Trump is inaugurated as the 45th US president, an event that many are hoping will offer clarity to some of the president-elect‘s positions. Traders were irked by Trump’s recent remarks pertaining to China, Russia, the European Union (EU), and other regions around the world and their governments. His comments fueled concerns of the uncertainty surrounding a Trump administration for the next four years.

Over in Great Britain, Prime Minister Theresa May will deliver a speech on Tuesday in which she will urge many Britons to deny the somber tone they may have when it comes to the nation’s exit from the EU.

Moreover, Marine Le Pen, Geert Wilders, and Frauke Petry are still maintaining plenty of energy of ahead of the elections in France, The Netherlands, and Germany this year. All three party leaders have been positioning themselves to gain considerable influence in their respective governments, riding a wave of momentum thanks in part to the victories of Trump and Brexit in 2016.

In the US, meanwhile, a growing number of investors are starting to doubt the Federal Reserve and its intentions to raise interest rates three times throughout 2017. Because of the aforementioned events, the US central bank may refrain from pulling the trigger on three rate hikes over the coming year. Gold is sensitive to a rising-rate environment because it lifts the opportunity cost and sends investors into yield-bearing assets.

If you have any questions and comments on the commodities today, use the form below to reply.

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