You Are Gold (Gold)

Wednesday, 3 February: Financials weighed on early morning trading in the UK as global fears continued to weigh on investors’ mind. Hargreaves Lansdown are the latest to release a trading update, with the British investment and share-dealing servicer reporting an increase in post-tax profit and revenues. Their total assets under administration rose 20%, whilst the interim dividend is set to be increased.  Despite the positive results, the shares fell by more than 4% as although margins are healthy, they aren’t as healthy as once was.

As brent oil trades positively, so to do the mining stocks in the UK. However, the bounce back in today’s  trading seems to be more of a reversal of Tuesday’s declines. Anglo American led the miners at the close today, ending the day +8.55%, whilst Rio Tinto, Glencore and Antofagasta all ended the day with positive returns. Brent oil spent all of European trading in the green before extending gains to over $34 late afternoon.

In the US, the service sector expanded in January, albeit slower than in December. The January reading of 53.5 was below expectations of 55.1, and below December’s reading of 55.8. The reading suggests the domestic economy contains to be stable, despite the uncertainty actions abroad are having on the market. The combination of this most recent data, with manufacturing data released earlier in the week, alongside a persistent strong dollar (despite it weakening today) and low oil prices, only makes investors’ focus on Janet Yellen and the Fed in their upcoming March meeting. The lack of conviction in a further rate rise in Q1 2016 has led to Gold climbing to a 3-month high. Private jobs created in the US increased by 205,000 in January (vs 190,000 expected), demonstrating that job creation remains strong , and eyes now turn to Friday’s non-farm payrolls. Gold, as a safe haven, has benefitted from global uncertainty since the turn of the year, gaining more than 6% since the start of 2016.