Gold is down 1.05% in USD terms but only 0.33% in GBP terms, just under £1000 at £990.83/991.62 Bid/Ask on Kitco. The pound appears to be in a bear market, down 0.8% against the US dollar at $1.2648.

Anyway, this is in the wake of Chancellor Philip Hammond’s abandonment of his predecessor’s commitment to balance the UK’s budget (as if that could ever be done!) by 2020.

Brexit has provided the ideal excuse to dump all semblance of fiscal responsibility and go for the money printing / zero interest rates / trash the pound route. It also keeps all the unionized government workers on fat salaries and pensions for the time being.

I don’t really see why this is so bearish for gold, except in that it is rallying the US dollar.

The UK hasn’t even started to begin thinking about the possibility of considering how to go about beginning negotiations for a Brexit until next year sometime, perhaps. The pound is already near $1.26,  so maybe we can look forward to parity by the time Brexit either comes or is abandoned during a giant EU crisis and panic somewhere down the road. There is support from way back in 1985 at around $1.05, I suppose. It appears to have broken down from its recent post-Brexit bear flag. Target would be somewhere around $1.11 depending on where you measure the move.

Will we get $1000 gold and £1000 gold at the same time?

Pound recent bear action:

gbpusd-breakdown-from-bearflag-flag-sc

Phase III of bear market well and truly here for the pound?

gbpusd-phase-3-of-bear-market-perhaps-sc