Less than 24 hours after Democratic House Speaker Nancy Pelosi announced that an official impeachment investigation has been launched in regard to US President Trump’s dealings with Ukraine, the price of gold remained steady after experiencing a price jump on September 24.
As of September 24 at 10:00 am EST, gold was sitting at US$1,517.20, however following the announcement from the speaker the value of the yellow metal surged to US$1,534.10 an ounce.
By 10:14 am EST on September 25, gold had lost some of the prior day’s momentum to hold near US$1,525.98.
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Give me my free report!Concern that the investigation could rattle markets creating uncertainty led to a stock sell-off while gold prices capitalized on the volatility.
“Gold is holding on to the gains from yesterday because of announcements which seem to have hit the dollar and risk appetite,” OANDA senior market analyst Craig Erlam told Reuters. “[That] is almost perfect for gold.”
He went on to note that the next coming days will be ripe with commentary that will likely weigh in risk appetite.
At 11:48 am EST the gains had been lost leaving gold at US$1,511.53.
Early in the month, the value peaked at US$1,546.70 — the highest price the yellow bullion has traded for since March 2013.
While the price has fluctuated by as much as US$35.17 over the last few weeks, EB Tucker, a director at Metalla Royalty & Streaming (TSXV:MTA,OTCQX:MTAFF), sees it remaining range bound at the US$1,500 mark.
“In our view, gold’s going to stabilize here at US$1,500, (and) silver will go from US$18 to US$20. And so, we are focusing a lot of our capital and resources on silver, because that to us is the easiest trade right now. And I would be shocked if that doesn’t happen before American Thanksgiving, which is only about eight weeks away,” Tucker told the Investing News Network at this year’s Denver Gold Forum.
Of course, that was prior to the impeachment announcement.
For many gold is considered a safe haven during times of political unrest and economic uncertainty, issues currently plaguing the international markets. The current political climate in Washington is likely to continue to impact markets resulting in a higher gold value.
How high remains to be seen.
A Federal Reserve interest rate cut in mid-September, paired with the turbulent political landscape could drive gold to new highs.
At the Precious Metals Summit, in Colorado, Rob McEwen, chairman and chief owner of McEwen Mining (TSX:MUX,NYSE:MUX), told INN he sees more gains in store for the yellow metal.
“I’ve always had a US$5,000 number, and I think it can go much higher than that,” he commented.
And now in light of recent events the possibility isn’t looking so unrealistic.
As of 12:34 pm EST gold was selling at US$1,503.98.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.