London - Gold jumped more than 1 percent to its highest in nearly
eight weeks on Tuesday, as excerpts of a speech to be given later by Britain's prime
minister pointed to a definitive exit from the European Union.
Safe-haven
assets such as gold, the Japanese yen and US Treasuries benefited as investors
sought refuge from the uncertainty of what a "hard Brexit" would mean
for global markets.
Spot gold
rose 1.1 percent to $1 216.11 per ounce by 1054 GMT, near highs last seen on
November 23.
US gold
futures were up 1.3 percent at $1 211.80 per ounce. The dollar, against a
basket of major currencies, fell 0.3 percent.
"It's
the uncertainty on Brexit that has created the risk-off environment which has
benefited gold," said Societe Generale Head of Metals Research Robin
Bhar.
"No
one knows what it really means coming out of the single market, the customs
union and allowing free movement. These are factors whose impact we are not
going to see for some time."
Gold is
often seen as an alternative investment during times of geopolitical and
financial uncertainty while riskier assets such as stocks are hit.
According
to a speech setting out Prime Minister May's Brexit priorities, Britain will
not seek an exit deal that leaves it "half in, half out" of the
European Union.
The dollar
slid after comments by President-elect Donald Trump that the greenback was
"too strong" and on prevailing uncertainty on his plans for the US
economy after his inauguration on Friday.
Trump's
campaign calls for tax cuts and more infrastructure spending have boosted US shares
and the dollar, as well as driving a selloff in Treasuries, but his
protectionist statements and a flurry of off-the-cuff Tweets have kept many investors
from adding to risky positions, instead opting for gold.
Investor
interest in gold was indicated as holdings of the largest physically-backed
ETF, New York's SPDR Trust, on Friday rose for the first time since November 9,
the day after Trump's election victory.
Credit
Suisse said in a note it remained "constructive" on gold prices,
forecasting an average of $1,338/oz in 2017.
Spot silver
was up 1.7 percent at $17.05 an ounce, to its highest level since December 14.
Platinum scaled two-month highs, climbing 0.8 percent to $988.49. Palladium
added 0.9 percent at $750.38.