Gold premium in pocket of opportunity.

The gold price is currently enjoying a "pocket of opportunity", says City AM, hitting another five-month high of above $1,290 an ounce overnight and settling at a still-lofty $1,284 this afternoon in London.According to Mining.com, this is being driving by the weaker dollar, as fears over US President Donald Trump's bombast over Russia, Syria and North Korea rattle markets.Some of the eventual softening related to comments from US Treasury Secretary Steven Mnuchin that tax reform remains high on the agenda.In general, gold has been rising to levels not seen since the election of Trump last November mainly because of the upheaval in global politics, which could hit stability on markets. The metal is a traditional "safe-haven" store of value at times of stress.Kieron Hodgson, a commodity and mining analyst at Panmure Gordon & Co, told City AM "factors are in place to push the gold spot price higher".The paper adds: "Panmure Gordon isn't waiting, and has upgraded its gold price forecast to $1,300 per ounce (from $1,225 per ounce) for 2017.
Gold price hits another post-Trump election high12 AprilThe gold price surged almost two per cent yesterday to hit a session high of $1,275 an ounce - its highest level since the election of Donald Trump last November.Spot prices settled at around $1,273 an ounce and remained at this level in London trading this morning.Trump's election success saw a brief bout of "safe haven" buying of gold, but then trading was hit by the so-called "Trump trade", with its expected boost to growth, inflation and so interest rates.A demand for safety is once again fuelling prices, this time the increase in geopolitical tensions around the world.Following the US air strikes in Syria last week, discussions at the G7 summit in Italy and elsewhere in the world yesterday saw political leaders "push to isolate Syrian president Bashar al-Assad", says Reuters, leading to fears of an escalation of the conflictAdded to that, North Korea's state media said it would respond to any act of aggression by the US with a nuclear strike, says CBC.In response, Trump announced he was sending an "armada" of "very powerful" military vessels to the Korean peninsula, adds the Financial Times. In a series of tweets, the US President said North Korea was "looking for trouble" and that if China did not help find a solution, "we will solve the problem without them".Lastly, says Reuters, there is underlying tension over the upcoming presidential elections in France, which could yield a victory for the anti-EU far-right candidate Marine Le Pen.Despite this, gold's rally could be hard to sustain as it "lacks momentum", Jeffrey Halley, senior market analyst at Oanda Corporation, told Reuters.If the geopolitical tensions ease in the coming days and gold falls below $1,240 again, this could "prelude a deeper correction", he warned.

Gold price falls 'suddenly and sharply'10 April US jobless figures add to speculation Federal Reserve will increase ratesLast week the gold price touched its highest level since Donald Trump won the US presidential elections in November, but then dropped "suddenly and sharply", according to Business Insider.The gold price rose on the back of market unrest following the US air strikes launched on a Syrian government military target on Thursday evening, amid fears the conflict could escalate.Trump indicated that the retaliatory strike would not be followed up with rapid further action when he "called on the Syrian government to abide by agreements not to use chemical weapons", says Business Insider.Spot gold had gone as high as $1,270 an ounce, but it ended the session closer to $1,255.In London today the gold price fell further. By around 2pm in afternoon trading it was below $1,250 an ounce, erasing all of the Syria-linked gains, says Daily FX.The focus shifted once again to increasing market bets that the Federal Reserve would accelerate the pace of interest rate rises.US jobless data published on Friday appeared dovish at first, but Daily FX says it's now viewed hawkishly by traders who believe the Fed will see the economy moving towards "full employment".It adds: "While the headline payrolls gain was far smaller than economists expected, the jobless rate fell even as labour force participation held steady and wage inflation remained near eight-year highs."On balance, traders seemed to read that as signaling the approach of so-called 'full employment' rather than something worrisome."Full employment means there is no spare capacity to fill vacancies because unemployment is low and those out of work do not have the requisite skills for the roles that need filling.In a society with full employment, the price of labour can increase and push up inflation, building up pressure to introduce higher interest rates.Gold tends to be inversely correlated to the trend in real interest rates – that is, borrowing costs adjusted for inflation – as it offers no income and so loses ground to yield-bearing assets.Trader attention is likely to focus on a speech by Fed chair Janet Yellen this week in which she could give further hints as to the pace of rate increases and the end of the central bank's bond-buying programme.

Gold price at post-election high amid market unrest07 AprilThe gold price is up more than one per cent this morning to reach its highest level since the US presidential election last year as the markets react to geopolitical events.In particular, US President Donald Trump's overnight air strikes against Syria have ratcheted up fears of a broader Middle East conflict, while Investing.com says his summit with Chinese leader Xi Jinping is being "closely watched by investors" for fear that a "negative outcome could hit China-US trade relations".Spot gold was up in excess of 1.1 per cent to $1,264 an ounce in London. It had risen above $1,260 an ounce yesterday, but pared gains following the publication of reports from the US Federal Reserve and Labor Department that were viewed as hawkish.The Fed released minutes of its March policy meeting, which hinted at a rates rise in June and indicated that its quantitative easing bond-buying programme would be unwound "later this year".That all points to tighter monetary policy, which is good for the dollar but bad for gold, against which the currency is negatively correlated.In addition, an estimate of jobless claims by the Labor Department showed a faster-than-expected fall of 25,000 to a total of 234,000 claimants last week.This also supports the case that the economy is enjoying "full employment" and that rate rises, which typically weigh on non-yielding gold, will come sooner.While focus is on the military tensions now, later today sees the publication of monthly employment figures in the US which could impact investor sentiment again.

Gold price 'could hit $1,485 an ounce' this year31 March Analysts predict political risks including Brexit and the Trump presidency will boost demand for precious metalThe gold price will rise and average above its current level for 2017 as a whole, according to two separate analyst reports.One of them even speculates on a plausible scenario where trading soars to $1,485 an ounce before the end of the year, says Bullion Vault.This particularly bullish forecast came from Metals Focus, whose base case is for gold to rise from where it is now and to average $1,285. Spot gold was highly volatile in London on Friday at around $1,246 an ounce.Metals Focus believes "political risks such as Brexit, the new US Trump presidency's 'saber-rattling' with China, European elections and ongoing conflict in the Middle East" will boost safe-haven demand for gold this year.Added to that, "interest rates from the US Federal Reserve will remain 'gold friendly' by failing to keep pace with inflation", says Bullion Vault.However, to get from this base case to the higher prediction will take a "political or economic shock", it adds.Analysts at Reuters give a similarly strong forecast, saying: "Buying of gold as a haven from risk, plus a recovery in Indian buying, are likely to push prices to an average $1,259."Until recently, analysts believed gold might struggle this year due to rising rates that boost the value of income-yielding assets and a lift to growth from Donald Trump's tax cuts and spending plans.However, in recent weeks the so-called "Trump trade" has unravelled as his policy agenda has run aground in Congress, giving gold fresh impetus.

Gold price hits one-month high after Donald Trump's 'spectacular failure'27 MarchCollapse of US President's healthcare bill raises questions over promised tax reforms and infrastructure spendingGold has been one of the main beneficiaries of a market correction following Donald Trump's policy agenda running into Republican divisions in the Senate, rising by 0.9 per cent today to $1,259 – the highest it has been in a month.On Friday, the US President and his House of Representatives speaker Paul Ryan pulled the controversial healthcare bill they had planned to replace "Obamacare", long a bete noire of Republicans.Repealing Obamacare was a major campaign pledge for Trump and the failure to see the legislation go through reflects deep-rooted divisions in the Republican Party, which analysts say could rise again to derail other promises on tax reform and spending.Saxo Bank's Ole Hansen told Reuters: "Trump's spectacular failure to get his… bill through Congress raises concerns about his ability to achieve his goals on other policies."With stocks, the dollar and bond yields lower and geo-political risks on the rise, gold may stand out as the commodity of choice."Trump's promise of up to $1trn of infrastructure spending and widespread deregulation sent risk assets surging after he was elected in November, with the dollar in particular rising to 14-year highs at the end of last year.But doubts have crept in over recent weeks and the currency has tumbled. The Financial Times says "the so-called Trump trade is nearing the point of being fully unwound".Concern the President's agenda could unravel at a critical time for the economy, which has been recovering steadily in recent months, has rekindled "safe haven" demand and drawn money away from equities towards bonds and commodities, with the Dow Jones down more than 500 points to 20,597 since the beginning of this month.This is all positive news for gold, which is inversely correlated to the dollar and equities, the most popular safe haven on wider markets. If the economy suffers, it is likely that interest rate rises, which diminish the value of the non-yielding metal, will come more slowly.Rodrigo Catril, forex analyst for National Australia Bank, said: "The Trump-specific boost to the US dollar and commodity prices… is at risk of completely unwinding."
Gold price surges as 'Trump trade' unravels"Maybe investors should forget the Trump trade and start prepping for the Trump correction," says Robert Burgess on Bloomberg, reporting that Wall Street equity gauges yesterday endured their worst single-day performance since October, with the Dow Jones and S&P 500 both falling well in excess of one per cent.At the same time, he adds, the dollar is in an "epic slump" and, after five days of decline, is the worst it has been since the election of Donald Trump in November."If markets truly believed that Trump's policies would juice the economy and spark faster inflation, then the dollar would be a prime beneficiary," he adds.On the other hand, "safe haven" investments – assets seen to be a safe store of value in times of stress – are rising, with government debt bonds and gold both "back in vogue".Gold benefits from a compound effect of the current sentiment shift: in addition to being a noted safe haven, it is inversely correlated to the dollar, against which it is held as a hedge.As a result, prices rose one per cent to $1,247 an ounce overnight before paring back slightly to $1,245 this morning.Just a week ago, gold was below $1,200 an ounce as the market priced in expectations, later vindicated, that the US Federal Reserve would increase interest rates.Gold is also negatively correlated to rates, which increase the opportunity cost of holding non-yielding assets.The market tremors, after four months of consistent rises and new all-time highs for equities, come amid mounting unrest about Trump's policy agenda.In addition to having his controversial travel ban rejected by a federal court for a second time, his drive to repeal  the so-called Obamacare health legislation is running into a quagmire of Republican division, the Financial Times says.This is raising doubts among those who had piled into risk stocks in anticipation of promised tax cuts and reforms.Alan Gayle, director of asset allocation at RidgeWorth Investments, said: "All the time they are spending on healthcare reform, they are not spending on tax reform."

Why did the gold price rally after the Fed raised interest rates?16 March Trading usually falls when rates go up, but the metal spiked overnight and is still ahead this morningThe gold price was expected to react badly yesterday after Federal Reserve officials voted to increase interest rates for the first time this year but the second time in three months.In doing so, says The Times, rate-setters "signalled the end of an era of ultra-low borrowing costs" in the world's largest economy.As gold does not offer an income and so losing out to yield-bearing assets, it tends to fall during periods of rising interest rates. Increasing rates also usually boost the US dollar, against which the metal is typically held as a hedge.But in the event, the gold price, which had retreated in the past couple of weeks ahead of the policy announcement, rebounded strongly overnight, spiking from around $1,200 an ounce to close to $1,230 at one point.By this morning, it was up more than two per cent to $1,224 an ounce.This may seem counter intuitive, but in a note to clients, Ole Hansen, head of commodity strategy at Saxo Bank, said this was exactly the trend seen before and after the last two rates hikes.As traders discount the price in the expectation of what is to happen - and with market bets on a rise yesterday running at 80 per cent this week - investors had effectively "priced in" the Fed's 0.25 per cent move.On the day, then, they looked for evidence of the trend to come and the Fed's message in this respect was dovish, says Mining.com.In their policy statement setting out the rise, rate-setters said the pace of increases would only be "gradual", reports Reuters, while the "dot plot" predicts only two more rate rises this year - the same as previously outlined.This may not be enough to keep pace with rising inflation, which will keep "real" interest rates negative, and that is good for gold. Another development overnight that may have influenced the metal was the election result in the Netherlands, where Geert Wilders' far-right PVV populist party lost ground.It could be a significant development that signals destabilising populist movements across Europe have peaked. As such, the need for investors to seek noted "safe havens" such as gold is diminished.

Gold price holds above $1,200 as political risks ramp up13 MarchThe gold price is holding its ground today. The yellow metal is back above the psychologically key level of $1,200 an ounce as investors seek protection from political risks.Gold slipped below the threshold on Thursday and fell again on Friday afternoon in London as evidence continued to mount that the Federal Reserve would increase US interest rates again this week.But gold ended the final session of last week slightly higher. After a positive Asian session overnight it was 0.3 per cent higher at $1,204 an ounce this afternoon in London.The gold price tends to fall when rates are set to rise as the metal does not offer a yield and so loses out to income-bearing assets.Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo, told Reuters that "people are now quite sure that interest rates will go up" and that this is "discounted into the gold price".Last week market bets on a rates rise at the Fed's March meeting rose to more than 80 per cent.The focus is on the "safe haven" value of gold as potentially destabilising political events loom that could rock the global economy and so weaken demand for risk assets like equities.The UK government has made it clear it intends to trigger Article 50 and formally begin the Brexit process as soon as tomorrow.To do so would probably result in the House of Commons rejecting amendments to the legislation that was passed in the House of Lords last week, including the guarantee of a parliamentary vote on any EU deal.Meanwhile the Dutch are going to the polls on Wednesday in the first of three major general elections in Europe this year, which will test the support for far-right populists.Geert Wilders's Party for Freedom has led the polls for much of the campaign. As most of the main parties say they're not prepared to work with Wilders this could pose a problem when forming a stable coalition government."Gold should find some safe-haven bids at these levels this week as the Dutch election became more fraught over the weekend," said Jeffrey Halley, a senior market analyst with OANDA.

Gold price below $1,200 on rates expectations 10 MarchGold has fallen below $1,200 an ounce, continuing a recent bearish run as bets grow on the US increasing interest rates next week.Trading overnight dipped below the threshold for the first time since the end of January, hitting a low of $1,196 an ounce. It pared losses this morning before turning negative again this afternoon.This reflects the broader pessimistic view on gold that has taken hold of late, relating to economic data suggesting the Federal Reserve will increase interest rates in the near future.The keenly watched non-farms payroll report, a monthly update on the number of jobs being created in the US economy, shows employers are estimated to have added 235,000 new jobs in February, well in excess of the 200,000 expected by analysts, reports the Financial Times.Unemployment ticked down from 4.8 to 4.7 per cent – holding below the five per cent considered by many economists to indicate "full employment" – while wage growth accelerated slightly from 2.6 to 2.8 per cent.All in all, it is hard not to see the figures as corresponding to the economic data remaining "strong", which Fed chairwoman Janet Yellen said last week would make an interest rates in the near future "appropriate".Rate-setters meet again next week and bets on a rise have gone from 30 per cent at the beginning of this month to more than 80 per cent.Rates rises tend to be negative for gold, which does not offer an income and so loses ground to yield-bearing assets.

Gold price hits four-week low on expected US rates hike08 MarchInvestors are betting strongly on another increase in US interest rates next week and gold is falling in response.Yesterday, the metal fell to $1,213 an ounce, its lowest level since 3 February. Despite having trimmed its losses overnight, it was sliding again this morning and stood at a dollar below yesterday's four-week low.Helping trigger this downward trend have been comments from Federal Reserve officials pointing to a rate rise at their next policy meeting next week.In particular, on Friday, Fed chairwoman Janet Yellen said explicitly that "a further adjustment of the federal funds rate would likely be appropriate" if the economic data remains strong.Investing.com says "at the current level of market odds, a March hike is now locked in".Reuters adds that "early last week, financial markets saw just a 30 per cent chance of the Fed raising interest rates in March; but by Friday… traders saw an 80 per cent chance".Gold tends to respond badly to rates increases, as this boosts the value of income-bearing assets at the expense of non-yielding alternatives such as commodities.Rising rates also typically coincide with a rising dollar, against which gold is often held as a hedge. In addition, they indicate rising confidence in the economy, which boosts risk assets and undermines gold's appeal as a "safe haven".However, while gold is down on recent levels, trading remains well above its position late last year and ahead of where analysts expected it to be.Societe Generale, for example, predicted an average gold price of $1,175 an ounce this year, while the World Bank believes it will average around $1,150.Investing.com says: "Investors should not forget that real interest rates are what really matters for gold prices – a small rate hike may not be enough to combat inflation and raise real interest rates."The Fed being behind the curve is a positive factor in the gold market."