19th April 2017

 Gold finished marginally higher on Tuesday, but the rest of the group lost substantial ground, with silver off by almost $.25/ounce, while platinum and palladium each shed roughly $14/ounce and $17/ounce respectively. There was no particular news behind Tuesday’s modest gain in gold save for the fact that the dollar retreated rather sharply, particularly against sterling, which soared to an eight-month high of almost $1.29 on news of a June election that was unexpectedly called by Prime Minister Theresa May. May said she decided “with reluctance” that an election was needed to secure a degree of political unity heading into the EU talks, but we suspect the British premier was also capitalizing on the evident drift characterizing the opposition and thus using the opportunity to expand her majority. (In fact, a British poll out Tuesday showed the Conservatives sporting a 21-point lead over Labour, the highest on record at this time prior to an election). While sterling reacted positively to the announcement, the FTSE sold off, finishing down 2.5%, although we are not exactly sure what seemed to have spooked equity investors here. Nevertheless, the weaker tone in the FTSE may have played a part in triggering spillover selling in US markets where the Dow finished down 113 points, with mediocre earnings reports from some US banking names not helping matters much either.