January recorded a conflicting month for the gold price, which fell slightly in value against a positive showing for sterling but held its ground against other currencies.
Against the backdrop of one of sterling’s best months since June 2016, the price of gold on the first day of 2018 was recorded at heights of £968.29, and ended the month on £951.23, a small drop of 1.76 per cent.
A strong month for Sterling
Sterling recorded both its most impressive one month increase in value since summer 2016, and its highest individual prices as the British currency rose above £1.40 against the dollar for the first time since the Brexit referendum in June 2016.
Despite having not yet recovered its pre-referendum highs of £1.49, developments in January bring it closer to this threshold. This is a good sign that investor confidence in the British economy looks to be firming up and even dare we say it potentially increasing after the conclusion of phase one Brexit negotiations.
Against this backdrop, it is harder for gold to perform as well against sterling as it has against currencies like the dollar. The small decrease in gold value against the pound of 1.76 per cent across January remains a modestly promising sign for the commodity, when judged against the increase of 5.26 per cent in sterling’s value against the dollar.
Tracking the January gold price
The highest gold price on the opening day of January was recorded at £968.29 per ounce. This increased steadily across the first 12 days of the month, reaching £973.29 on the 4th January and further increasing to £981.31 on the 12th. The safe haven phenomenon bolstered gold against multiple currencies as Trump’s scepticism of the 2015 nuclear deal with Iran led to sanctions being waived for this year. Concerns in the stability of the dollar and the overall American economy continued through January, with chaos shaking investors’ resolve when the government was briefly shut down.
In later weeks, gold fell against a strengthening pound, sinking to £955.14 on the 18th of January and £948.74 on the 25th.
What does this mean for the price of your gold coins?
Despite the overall gold market showing promising resolve at the start of 2018, the individual prices against sterling are less impressive. Of course – it’s all relative; the roughly £950 you’d get for a troy ounce of gold at the end of January is worth more in real terms than if you’d gotten the equivalent amount of sterling this time a month ago.
Nonetheless the gold price has dipped, perhaps making this a good time to buy gold as the international strength of the commodity signals it remains a stable and reliable investment, while the comparatively cheaper prices in the UK mean you’d get a good price for your investment if you were to buy today.