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Gold prices retreated from a two-month high as investors are bullish on the stock market. The Dow Jones Industrial Average closed above 20,000 for the first time on Wednesday. However, gold is still viewed as providing protection from economic uncertainties due to its enduring value. Earlier this week, gold price hit its highest level to $1,219.43 an ounce since Nov.22, driven by uncertainty the future economic developments in the U.S and Europe, as well as a weaker dollar.
Back in 2016, gold traded higher when unexpected events happened such as the U.K.’s decision to leave the European Union, “Brexit”. Concerns about a Eurozone break-up may be the biggest potential risk in 2017 as France, Germany and Netherlands will hold national elections. Rise Resources Inc. (CSE: UPP.CN) (OTC: RYES), McEwen Mining Inc. (NYSE: MUX), Gold Standard Ventures Corporation (NYSE: GSV), Northern Dynasty Minerals Ltd (NYSE: NAK), Vista Gold Corporation (NYSE: VGZ)
According to a research note from UBS, “We think this is warranted and see room for gold to extend upwards as markets digest uncertainty around U.S. fiscal policy. But gold has also recovered considerably and market uncertainty at this point could encourage investors to lock in whatever profits they can for now, especially as seasonal gold demand fades…We think gold’s performance, as the typical Q1 seasonal demand fades, should provide a good gauge of investor sentiment towards gold at this point.”