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What Happened to the Gold Price in 2017?

Friday, January 5, 2018

Over the course of 2017, the gold price recorded modest rises. Despite fluctuations, the market approaches 2018 with a more optimistic outlook than it has enjoyed in some years. Geopolitical tensions, repeating fears of a hike in the US Federal Reserve rates and downbeat figures and forecasts for the US economy and its currency have all led to an increase in safe haven buying over the course of 2017.

2017: An overview

On the 3rd January 2017, the gold price was £935.12. It ended the year on the 31st December 2017 up just over 3 per cent, at £964.88, with the year’s highest recorded spot prices being £1,025.91 and £1,029.02 on April 14th and September 4th respectively.

Despite this modest increase, the year’s lowest price against Sterling was recorded on the 13th December at £929.38. The markets managed to recover from the dip however in the closing weeks of December.

What caused the gold price fluctuations?

The price of gold gradually rose in the opening months of 2017, peaking at £996.81 on the 6th January, £1,012.17 on the 27th February and £1,025.91 on the 13th April. A weakened dollar, combined with geopolitical tensions over North Korea led to an increase in safe haven buying and we saw the age old trend of demand inflating the gold price.

The price quickly dipped to £943.89 in the opening days of May as Emmanuel Macron’s French Presidential election victory reassured investors and looks to have decreased the safe haven effect. After a brief spike to £1,003.37 on June 6th, the price fell again to £941.59 by July 11th.

Gold regained ground over the coming months, reaching £1,029.02 on September 4th, the record high for the year, which again came amid global uncertainty as North Korea continued with its nuclear tests.

The final weeks

In fact the most dramatic moments of the year occurred towards the end. In the space of two weeks, gold lost 4.6 per cent of its value, dropping from £974.18 to the lowest recorded price of the year, £929.38, between the 28th November and 13th December. This came amidst continuing Brexit confusion in the closing weeks of the first phase of negotiations.

These losses were quickly recovered, with the price rising back to highs of £964.875 on the final day of 2017.

The increases in 2017 were modest but nonetheless promising, and gold begins the year on a firm footing.

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