Commodities Round-up: Gold rallies past $1,230 as safe-haven seekers continue to support uptick

Gold futures rallied above $1,230 an ounce on Monday (6 February) as safe-haven seeking investors continued to bet on the physical gold market, with the Trump White House, Brexit jitters and prospect of political turmoil in Europe sparked a retreat from riskier assets.

At 5:33 pm GMT, the Comex gold futures contract for February delivery was 0.89% or $10.90 higher at $1,231.70 an ounce, while spot gold was up 0.79% or $9.62 at $1,229.92 an ounce.

London-based bullion trader The Pure Gold Company said many of the gold purchases were coming from people citing concerns about the effect on financial markets of President Trump's immigration policie and international relations, but European politics and the French election are increasingly coming to the fore.

Josh Saul, trading outfit's chief executive, said: "Around 23% of our sales this week have comprised of US nationals purchasing gold over concerns for their own economy and currency prospects. They cite worries that Trump is committed to aggressively increasing interest rates, which would increase mortgage costs and force some people to sell their property as mortgage payments become unaffordable.

"Astonishingly, over 46% of people purchasing gold from us this week are first-time buyers who have cited little experience in investments or the financial markets. There seems to be an overwhelming concern for the unknown. In addition to geopolitical concerns, people are worried about the strained US and UK relationship and what this might mean for Brexit."

On Friday (3 February), the World Gold Council (WGC) said investors' takings via exchange-traded funds (ETFs) helped total global demand climb by around 2% to 4,309 metric tonnes in 2016, the highest since 2013.

Away from gold, Comex silver was up 0.98% or 17¢ at $17.65 an ounce, while spot platinum was 0.52% or $5.24 higher at $1,010.01 an ounce, well clear of the psychological $1,000-level it last breached in January.

Meanwhile, oil futures headed lower, albeit within the recent range. At 5:54pm GMT, the Brent front month futures contract was down 1.36% or 77¢ to $56.04 per barrel, while West Texas Intermediate (WTI) was down 1.04% or 567¢ to $53.27 per barrel.

Bjarne Schieldrop, chief commodities analyst at Nordic Bank SEB, said Opec will likely move back to normal operations in the second half of 2017, but only modest growth in output would be forthcoming in the coming years due to lack of investments.

"We are not optimistic about [Opec member] Libya and expect production to fall back to 0.5m barrels per day (bpd) from current levels of 0.7m bpd and opposite of many estimates of a revival to 1.2m bpd (due to too many moving parts and too many struggling forces). We expect Opec's production at 32.7m bpd, 33.1m bpd and 33.0m bpd for 2017, 2018 and 2019."