Earlier this week (Nov 2) the gold price broke above US$1,300/oz (£1,042) for the first time since early October as the US presidential election tightened up.
A new wave of uncertainty injected into the presidential election has pushed investors to hedge risk through high quality, liquid assets such as gold.
In turn, the gold price broke its 200-day moving average (US$1,275/oz) and breached the key US$1,300/oz level on Nov 2 where many call options were likely executed.
This is a price in pounds that has not been seen since 2013.
In addition, on a two week comparative the gold price posted its strongest gain since the surprise result of the British referendum in late June, when gold also fulfilled its classic safe-haven role.
The Wold Gold Council reports: “We expect that both the presidential and congressional elections results will be supportive of gold regardless of the outcome, given the high uncertainty in the direction of policy and the possibility that the results may be contested.
“In our view, rising nationalist movements and political uncertainty around the world, as well as the prevalence ineffective monetary policies, make gold a valuable hedge and key component to investment portfolios long term.”
For the UK jewellery industry, the rising price of gold, coupled with the weakness of the pound, is currently making it a massive cost for British gold importers.
Recently, in an interview with the Aurum Holdings local paper, the Leicester Mercury, Brian Duffy, said: “Anything we import is more expensive now, so at some point, even everyday commodities are going to become more expensive for people to buy. We’re seeing that with gold and diamond prices now as we buy everything in dollars. The gold prices are rising and the diamond prices will rise.”