"May’s plan to strengthen her hand in the negotiations by increasing her majority has been an abysmal failure"
By Daryl Jackson, News Editor
09 Jun 2017
Gold saw initial gains as a result of the shock election for investors in the UK. Across the rest of the world the price hardly moved.
Gold priced in sterling rose as much as 2.2 percent to 1,007.52 pounds an ounce, a seven-week high. The move was driven by the pound, which sank after Prime Minister Theresa May failed to win an overall majority.
Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London said:
“The political situation is anything but strong and stable...There is quite a bit of potential for support for gold, certainly in sterling and possibly also in dollars, in the near term.”
However a minority Government could create uncertainty across the city.
Larry Elliot, the Guardian's Economics Editor said:
"May’s plan to strengthen her hand in the negotiations by increasing her majority has been an abysmal failure. There are now obvious and serious questions being asked about what the final deal will look like and whether the article 50 talks can be completed within the two-year deadline.
Unsurprisingly, the CBI expressed concern at an outcome that is bound to make business warier about investing".
Willem Buiter, global chief economist at Citigroup, says Theresa May is effectively a ‘lame duck’ PM.
He told Bloomberg TV that it’s now unlikely that Britain will start its Brexit negotiations on June 19th as planned.
Political commentators are suggesting Theresa May could face a rebellion, as some in her party might blame her for losing both a sizeable lead in the opinion polls and valuable Brexit negotiation time.
This could mean that her position might become much weaker, possibly to the extent that she will have to stand down, thereby triggering a leadership contest.
As we saw after the EU referendum last year, the Conservatives can pull together relatively quickly to elect a leader, but the risk is that the process is long and drawn out over the summer.
Meanwhile, it is understood that Britain’s banking regulator has been quietly checking whether customers have been taking out more cash than usual today (Friday).