Gold got back to the swing of its upward momentum for 2017 yesterday following its drop on Friday in the wake of positive employment and wage data from the US.
Prices rose back above their one-month high of $1,185 an ounce hit last Thursday and hit a peak of $1,187 in Asian trading this morning.
Trading was slightly lower, at $1,183 an ounce, at 10.30am in London.
Chief among the triggers for the fresh rally is market jitters after Theresa May pointed towards the UK have a hard Brexit.
ANZ analyst Daniel Hynes told Reuters: “The comments on the UK around Brexit that impacted the pound saw some safe-haven buying.”
He added that gold was “also getting support from strong physical buying in China ahead of the Lunar New Year later this month”, adds the news agency.
However, analysts are not convinced there is any significant upside left to the rally, which has seen gold recover from a low of $1,124 shortly after the election success of Donald Trump in November.
In fact, several have told Reuters they expect prices will continue to find resistance at $1,200 or lower in the near term.
In part, this reflects a lack of enthusiasm from hedge funds and other institutional investors, who Mining.com reports have dropped long positions, bets on prices rising in the future, by 90 per cent since a peak last July.
At the same time, they’ve doubled their short positions on falling prices.
Source: The Week
