LONDON: The UK’s shock election result sent gold rallying, but only for British investors. In the rest of the world, prices barely moved. Palladium surged more almost 8 per cent to its highest since 2001.
Gold priced in sterling rose as much as 2.2 per cent to 1,007.52 pounds an ounce, a seven-week high. The move was driven by the pound, which sank after Prime Minister Theresa May failed to win an overall majority.
In dollars, gold retreated 0.3 per cent to $1,274.07 an ounce as the dollar strengthened. Bullion is set for the first weekly loss in a month, sliding 0.4 per cent.
“The political situation is anything but strong and stable,” said Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London. “There is quite a bit of potential for support for gold, certainly in sterling and possibly also in dollars, in the near term.”
Some investors took advantage of higher prices for sterling-priced gold to sell positions, according to Bullion Vault, a London-based online trading platform.
“Traders were not as active as they were during the early hours of the Brexit referendum result,” Adrian Ash, head of research at Bullion Vault, said in an email. Volumes were four times higher than normal from 10pm. London, when the exit polls were released, to 9am, he said.
Palladium rallied as much as 7.9 per cent to $928.36 an ounce, the highest since February 2001. The metal traded at $909.70 an ounce at 12.39pm in London, only about $38 an ounce cheaper than platinum. Both are used to clean the exhaust fumes of cars and investors have shifted their focus to palladium as consumers have started to move away from diesel to gasoline, where it most of it is used. Silver for immediate delivery traded down 0.6 per cent at $17.3359 an ounce.
