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Gold and silver up as global geopolitical disputes intensify

By Lawrence Gash

Precious metals gain following last week’s losses and increasing global uncertainty

Gold and silver have bounced back after last week’s losses.

December gold futures rose to $1,498.50 an ounce by mid-afternoon UK trading, a gain of $10.10. Silver prices for the same month were up by $0.096 to $17.64 an ounce.

Both metals suffered last week in the wake of positive noises from the first round of Sino-American trade negotiations, and from the surprise announcement that the EU and the UK were reopening talks to find a suitable Brexit withdrawal agreement.

Such announcements caused gold in particular to drop by more than 1 per cent on Friday alone.

However, risk-averse investors are returning to the safe-haven asset as uncertainty around both negotiations returns and the mood music worsens.

A further cause for a return to gold was the news that China’s exports to the US dropped by around 22 per cent year-on-year in September.

Further evidence for gold’s long-term value as a safe haven asset can be found in a report from the Netherlands’ central bank. In a report published at the end of last week the Dutch National Bank observed: “Shares, bonds and other securities: there is a risk to everything. If the whole system collapses, the gold stock provides a collateral to start over. Gold gives confidence in the power of the central bank's balance sheet.”

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