What’s Brexit doing to the Gold Price?

In the last days of November, the price of gold went from a 10-day high to nearly a 5-month low in some of the most dramatic fluctuations we’ve seen in prices in 2017. After confusing signals over Brexit negotiations, and further darkening economic outlooks, volatility is beginning to pick up in the gold price after months of slow movement.

But what do these developments mean for the price of your gold, through to 2018 and beyond?

A Brexit breakthrough?

The end of November brought encouraging signs that the EU had agreed on a divorce settlement, with news being leaked that a ‘divorce bill’ had been established. Despite debate raging over the size of the bill, investors were in unanimous agreement that a deal was better than uncertainty: Sterling was bolstered against the dollar and the Euro, with the British economy looking to be on firmer ground.

The renewed general levels of economic confidence weighed down on the gold price, with the 10-day high of £979.27 seen on the afternoon of the 28th falling 3.97 per cent, to £940.38 by the 30th. This figure was the lowest gold price since the middle of July, and came amid further positive developments in the American economy. As you’d expect from the infamous safe-haven asset – good economic news tends to push the gold price down.

Gold price jumps back up amid further uncertainty

Any certainty that the end of November saw on a Brexit deal was clearly history by the beginning of December. After a sudden intervention by the DUP, the expected deal was brought to a sudden halt.

The rises in Sterling began to reverse, and the price of gold climbed once again, regaining ground from its lows to £953.99 on the 5th December, with prices continuing to rise on the 6th December.

Will more uncertainty continue to bolster the gold price?

The UK government and the EU have since come to an agreement and broken through on several sticking points allowing negotiations to finally move forward. For the time being confidence in Sterling and the economy has firmed up once again. But Brexit as a whole is far from a done deal, talks are now moving on to trade agreements and who knows whether or not these will take a smooth path.

Amid the Brexit background, gold will likely continue to play an important role as a safe-haven asset, and analysts have suggested that its role as a reliable investment option will prove important throughout 2018 and beyond.

If you want to take advantage of the volatility in the gold price and secure an investment in gold, then have a look through our selection of investment gold bars today.


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