Gold price set to move beyond the $2000 mark as pound drops

by Jonathan Adams
Gold price

The price of gold was up more than $16, as global currencies weakened amid a rise in coronavirus cases and the prospect of a no-deal brexit

Gold prices continue to edge higher this week, with global currencies weakening and equities coming under renewed pressure as Covid-19 cases surge and investors grow increasingly worried about the prospect of a no-deal Brexit.

The price of gold was up more than $16 to trade at $1957, with the precious metal capable of pushing above the psychological $2000 mark in the coming weeks as macroeconomic headwinds could see investors flock to safe-haven assets.

There are considerable differences between the UK and EU, with reports that the senior British legal advisers quit amid plans to scrap important aspects of the Brexit withdrawal agreement earlier this week.

According to news reports, the UK government is considering revoking its agreement to allow Northern Ireland to remain aligned to the EU customs union, which, if allowed to happen, would ensure a no-deal Brexit and plunge the British economy into turmoil.

The news plunge the pound to a six-month low against the euro and caused the FTSE 100’s recovery to run out of steam as investors become more risk-adverse amid the economic and political uncertainty.

The precious metal also got a boost from wider economic uncertainties stemming from the coronavirus pandemic after AstraZeneca’s vaccine trial was delayed due to a patient falling ill.

The news has weighed on UK stocks and prompted the World Health Organisation’s (WHO) chief scientist to label the event a ‘wake-up call’ for those attempting to combat the virus.

‘This is a wake-up call to recognise that there are ups and downs in clinical development and that we have to be prepared, Soumya Swaminathan told a virtual briefing from Geneva. We do not have to be discouraged. These things happen.

This article is for information purposes only.
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