Gold price hits highest in over a month on Brexit, Trump concerns

London (Jan 10)  Gold rallied to its highest level in more than a month on Tuesday as the dollar dipped ahead of a news conference on Wednesday by U.S. President-elect Donald Trump.

The market is looking for more clues on Trump's spending plans in the first speech since his shock win in November, pushing the dollar lower.
The pound and stocks also slid on fears of a "hard" Brexit after British Prime Minister Theresa May said at the weekend she was not interested in Britain keeping "bits" of its EU membership. 

Gold, often seen as an alternative investment during times of political and financial uncertainty, benefited from the
risk-averse sentiment in the market.

Spot gold hit its highest since Dec. 5 at $1,187.61
an ounce and was up 0.2 percent at $1,184.46 an ounce at 1250
GMT.
    U.S. gold futures were flat at $1,183.70 per ounce.
    ABN AMRO commodity strategist Georgette Boele said the
combination of a soft dollar, lower U.S. yields and risk
aversion created a supportive environment for gold.
    "We have this Trump conference coming up tomorrow and the
market seems to be a bit nervous ahead of it," Boele said,
adding that this sentiment would be short-lived as U.S. interest
rates are expected to rise at least three times, denting gold.
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding the non-yielding
asset while boosting the dollar, in which it is priced.
    Strong physical demand from the Chinese new year also buoyed
prices, Marex Spectron's head of precious metals David Govett
said.
    "Gold seems to be behaving true to January form at the
moment, with physical demand picking up ahead of the Chinese
Lunar new year and investors starting to buy as the great
unknown of the Trump presidency looms," he said.
    Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell 1.06 percent to 805.00
tonnes on Monday. The holdings have dropped about 15 percent
since the November U.S. presidential elections.
    Silver inched up 0.3 percent to $16.56 an ounce and
platinum was down 0.8 percent at $974. Platinum rose to a
two-month high of $981.90 an ounce in the last session.
    Palladium fell 0.3 percent to $758.60 per ounce.

Source: Reuters