Gold price struggles with Brexit deal breakthrough
Yellow metal drops but US-China uncertainty stops losses
Gold prices have struggled throughout the week following increasingly positive geopolitical news.
Investors booked their profits following the United Kingdom and the European Union agreeing a new Brexit deal. Continued uncertainty as to Sino-American trade relations and poor Chinese economic data prohibited a precipitous drop in the gold price.
Spot gold dropped more than by 0.1 per cent to around $1,487.80 (£1,153) an ounce in mid-morning trading while major U.S. gold futures fell 0.47% to $1,491.60.
Prime Minister Boris Johnson has surprised many by amending the existing Withdrawal Agreement; the European Union had stated for months that the Northern Irish backstop could not be changed.
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The possibility of a no-deal Brexit, in which Britain leaves the EU on World Trade Organisation terms, is not off the cards completely. Mr Johnson is expected to offer MPs the option of supporting either his deal or no-deal. Thus far, it has been thought that the uncertainty of a no-deal Brexit would cause a sharp rise in the price of gold, a traditional safe haven asset.
News of China’s disappointing third-quarter growth also limited gold’s recent drop. The emerging superpower reported GDP of just 6 per cent between July and September, less than the 6.1 previously expected and the lowest level recorded in more than 25 years.
