Market and product

Gold futures broke above $1,300 an ounce, rising to the highest level this year, as global stocks dropped and investors fretted that turmoil in the White House will prevent President Donald Trump from delivering on his pro-growth legislative agenda.

Futures for delivery in December advanced as much as 0.7 percent to $1,301.10 an ounce on the Comex and traded at $1,299.30 at 9:32 a.m. in London. The gain came as a gauge of global stocks extended a decline, and the Bloomberg Dollar Spot Index fell 0.2 percent.

Gold has added 13 percent this year as Trump failed to deliver on campaign promises to ramp up U.S. growth by cutting taxes and boosting infrastructure spending. This week, the White House has been under fire for Trump’s response to white supremacist demonstrations in Charlottesville. Bullion has also been in demand after a terror attack in Barcelona, and as quiescent U.S. inflation calls into question the Federal Reserve’s ability to go on raising interest rates.

Bullion could scale $1,300, John Laforge, the Sarasota, Florida-based head of real assets strategy at Wells Fargo Investment Institute, predicted in an email earlier this week. “But we doubt it amounts to a monster rally. The catalyst would likely be more stock volatility or stock market declines. Gold is one of the better defensive assets.” - Source: Bloomberg -