Gold has climbed in this last week, possibly boosted by increased concerns about a global economic slowdown, and the upcoming Commons vote on Brexit. At the beginning of last week, we saw the price move from £973 Monday 4th AM, to £998 this morning, that’s quite a gain of over 2%.
The question now is, will this increase hold, or will we see it fall back down to the levels we saw at the beginning of last week? Like the wheel of fortune: round and round she goes, where she stops nobody knows!
As we have seen over these last couple of years, Brexit has been a major mover in the markets and continues to be so. At the time of writing this, Brexit talks between the UK and EU are still deadlocked, and this is just a day before MPs are expected to vote again on Theresa May’s deal. The UK is due to leave the EU at the end of this month, yet no deal has been decided, and the chances of Mrs May’s deal being approved by Parliament look very slim at the moment.
With Brexit still up in the air, this seems to have caused some increased pressure and our golden safe-haven looks more and more attractive to investors.
As we discussed in our blog a couple of weeks ago, the world economy continues to slow. Uncertainty is increasing and so, again, gold is more alluring.
Reports state that the U.S. apparently only created 20,000 jobs in February, the weakest since September 2017, and there is still uncertainty over the US & China trade war as Washington and Beijing are still yet to set a date for a summit to resolve the dispute.
China’s weakening growth has been associated with the trade frictions with the U.S., and we read that Trump has threatened a 25% tariff on $200 billion in imports which could pile the pressure on China’s already vulnerable economy. China is also a key export market for Germany, who themselves are also having a difficult time financially.
Where She Stops, Nobody Knows
The price of our favourite precious metal seems to be in upturn at the moment, but who knows what may happen after the Brexit vote tomorrow? Where the price will go is anyone’s guess - like the wheel of fortune, we can only spin the wheel and hope for the best!
Whatever happens, we remain strong believers in the resilience of gold, and as an investment in, or for, the future. A physical asset that you yourself can hold in your hand and will still be there in years to come.
Wherever the wheel takes us, we would say that that makes gold a winner.
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.