Gold climbs to fresh 8-week high ahead of May's Brexit speech

By Investing.com / January 17, 2017 / in.investing.com / Article Link

Investing.com - Gold prices climbed to the highest level in around eight weeks on Tuesday, as investors looked ahead to a highly-anticipated speech by British Prime Minister Theresa May later in the day, at which she is expected to outline her plans for a 'Hard Brexit'.

Gold for February delivery on the Comex division of the New York Mercantile Exchange touched a session peak of $1,212.50 a troy ounce, a level not seen since November 23.

It was last at $1,210.85 by 3:00AM ET (08:00GMT), up almost $15.00, or 1.2%. Markets in the U.S. were closed Monday for a public holiday.

Britain will not seek a Brexit deal that leaves it "half in, half out" of the European Union, Prime Minister Theresa May will say on Tuesday, according to her office, in a speech setting out her 12 priorities for upcoming divorce talks with the bloc.

Those priorities will include leaving the European Union's single market and regaining full control of Britain's borders, several newspapers reported, reinforcing investor fears of a 'Hard Brexit'.

May has previously stated she will trigger Article 50, which starts the formal withdrawal process from the European Union, by the end of March, but so far has given few details about what deal she will be seeking.

She is due to set out more detail on her plans on Tuesday in a speech at around 11:45GMT (6:45AM ET) to an audience including foreign diplomats and Britain's own Brexit negotiating team.

Meanwhile, global financial markets will continue to focus on U.S. President-Elect Donald Trump as he takes the Oath of Office and offers his inaugural address on Friday.

Investors will welcome any detail he may give on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy.

President-elect Trump has been credited with being a major catalyst behind the market's impressive rally since election day, although he has yet to outline his economic policies in detail.

Markets were disappointed last week after Trump failed to offer details on his promises to boost fiscal spending and cut taxes at a highly-anticipated news conference.

The precious metal has been well-supported in recent days, climbing for seven sessions in a row, amid uncertainty surrounding the Federal Reserve's pace of interest rate hikes this year.

The Fed had indicated in December that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot.

However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com's Fed Rate Monitor Tool.

A delay in raising interest rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar.

Also on the Comex, silver futures for March delivery was up 21.2 cents, or nearly 1.3%, at $16.98 a troy ounce during morning hours in London.

Meanwhile, platinum tacked on 0.55% to $991.80, while palladium dipped 0.2% to $747.65 an ounce.

Elsewhere in metals trading, copper futures dropped 5.7 cents, or 2.1%, to $2.633 a pound.

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