The European Union has agreed to extend the Brexit deadline again; this time to January 31st, 2020. There was little surprise this morning surrounding the announcement, with many expecting such an agreement to be a formality.
Sterling climbed fractionally from $1.281 overnight to $1.285 this morning, while the Euro also made slight gains vs the US Dollar; from $1.107 to $1.109.
Investors have been quick to jump on any Sterling optimism in recent weeks, with several sharp jumps in the Pound’s value against the Dollar, but at present hesitation is prevalent as investors wait and see what the UK Parliament does next.
GBPUSD firming a touch but extension was expected and now means election risk. pic.twitter.com/ait56WV6rs— Neil Wilson (@marketsneil) October 28, 2019
Uncertainty is rife in the House of Commons, with the potential outcomes for Brexit of accepting Prime Minister Johnson’s deal, a simple no-deal Brexit (even if it would technically be illegal), or the organisation of a general election or a second referendum to break the deadlock. Political change – especially in such a divided political landscape such as Britain is today – is always hard to predict, and those looking to invest are once again playing wait and see.
Despite domestic currency pressures, gold demand is holding firm – as is evident from the gold price in Dollars. The USD is strong at present – too strong if some analysts are to be believed – but the gold price in Dollar terms is still above $1,500 per ounce and has been around this mark for the past three months.
Gold has gained $275.35 per ounce in the past 12 months – a percentage increase of 22.37%. With the global economy slowing down, investors and central banks alike are keen to diversify into a safe haven asset like physical gold to protect their funds against known and unknown entities.