Gold Rises On Flight To Safety

Gold Rises On Flight To Safety

Gold rises on flight to safety. Gold and silver rose this morning as investors fled to safe-haven assets after the U.K. Parliament blocked Prime Minister Boris Johnson’s timetable to exit the European Union by the end of this month.

An election in the U.K. looked more likely after the House of Commons — within minutes — voted to back the government’s new withdrawal bill and then rejected the timetable. European Council President Donald Tusk said after the vote that he would recommend that EU leaders agree to an extension. Johnson will seek an election if a delay is granted, the BBC reported, citing an unidentified person in Johnson’s office.

Investors also sought a hedge against geopolitical uncertainty after the Financial Times reported that China was drawing up a plan to replace Carrie Lam as Hong Kong’s chief executive after violent protests against her administration. An interim chief executive would take over leadership of the former British colony in March, according to the plan.

Bullion slipped 60 cents Tuesday to settle at $1,487.50 an ounce on Comex. It has closed below the key $1,500 threshold for eight consecutive sessions. Gold declined 0.4% the first two days of this week, but is up 1% this month. Currently the December contract is at $1,497.50.

Most Asian stocks fell Wednesday and Treasury yields were steady after dropping Tuesday. Investors continue to seek direction from the status of U.S.-China trade talks and signals on monetary policy and the health of the global economy.

U.S. President Donald Trump said Monday that talks are on track for the U.S. and China to sign a trade agreement in November.

The CME FedWatch Tool showed early Wednesday that 94.6% of investors think the U.S. Federal Reserve will reduce interest rates by 25 basis for a third consecutive time when policy makers meet on Oct. 30. The probability of no change was 5.4%. The European Central Bank has a monetary-policy decision scheduled for Thursday.

U.S. home sales fell more than expected in September, according to data released Tuesday from the National Association of Realtors, reversing two months of gains. The U.S. will release weekly data on initial jobless claims Thursday.

Silver’s losses Tuesday outpaced gold’s. The metal decreased 0.6% to settle at $17.50 an ounce on Comex. The December contract is down 0.4% this week and up 3% this month. Spot palladium declined Tuesday but remains up 4.8% in October. Spot platinum was higher Tuesday. It’s up 1% this month.


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