Mixed Week of News: Gold Goes Up, Gold Goes Down

This week was an incredibly bumpy ride for precious metals, as they were battered around, one moment spiking higher, than the next plummeting lower.

The reasoning for this volatile week in not only precious metals, but the markets as a whole, was because a number of key pieces of data were released this week, as well as some major breaking news in regards to the BREXIT movement.

The first piece of information that affected the precious metals market was the recently released US housing data figures, which painted a muddy picture in regards to the overall health of the US housing market.

The United States Commerce Department stated that US homebuilding fell from an impressive twelve year high, with housing starts falling by 9.4%, or 1.256 million units last month alone.

However, data for August was also revised, showing stronger than previously reported numbers, with housing starts being adjusted to 1.386 million units, from the previous level of 1.364 million units.

This data, which initially saw gold bullion move higher, then caused it to fall lower, as overall the general health of the US housing market is still in relatively good shape, due to it being artificially supported by low interest rates, that expected to move even lower in the coming months.

The next major news that would cause gyrations in the precious metals market would be the announcement by Boris Johnson, the Prime Minister of the United Kingdom and leader of the Conservative party.

Boris Johnson has been in intense negotiations with the European Union throughout the week, going back and forth on key sticking points, hoping to find a resolution to a problem that has been plaguing the EU and the UK for years.

Finally, it appears that both parties have found a middle ground and are satisfied with the "potential" deal that is soon to be made public.

European Commission President Jean-Claude Juncker took to twitter, breaking the news;

"We have one! It's a fair and balanced agreement for the EU and the UK and it is testament to our commitment."

In addition to the above statement, he attached his letter to the President of the European Council, Mr Donald Tusk, indicating his support for the deal.

Backing these statements up, Prime Minister Boris Johnson also made a statement on twitter, writing the following;

"We’ve got a great new deal that takes back control — now Parliament should get Brexit done on Saturday so we can move on to other priorities like the cost of living, the NHS, violent crime and our environment."

This significant news caused gold bullion to drift lower and the stock markets to move higher, as if this deal is truly reached, then it would be a major alleviation of geopolitical tensions that has existed for years, eliminating the uncertainty of a "hard BREXIT", "no deal".

At the time of writing, gold bullion is trading below the key $1500 level, at $1490.58, while silver stands at $17.51.

These current prices, however, are above the recent lows, as can be seen from the charts above, as both gold and silver bullion have regained some ground from levels seen after the BREXIT news first broke.

The true question now is, will BREXIT finally get done? Or will the people of the UK continue to live with this uncertainty hanging over their heads?

Both the European Union and the UK Parliament now need to vote and finalize this deal. With the latter likely being the biggest hurdle to get over, as Boris Johnson now needs to convince both his party, the people and the opposition that this deal is actually a good one and in their best interest.

We shall have to see what unfolds over the weekend, when votes are set to take place. Will this uncertainty finally end? Will the people of the United Kingdom finally get BREXIT?

We shall soon find out.


- As first seen on the Sprott Money Blog