Gold climbs higher in risk-off mar­ket

The Daily Telegraph - Business - - Business - La­toya hard­ing

A RISK-OFF mood on global markets lifted the price of gold to more than $1,800 (£1,426) an ounce for the first time since Septem­ber 2011.

The pre­cious metal – seen as a safe haven – has been on a steady up­wards tra­jec­tory over re­cent months against a back­drop of eco­nomic tur­moil and con­cerns that in­fla­tion may rise in the near fu­ture. A softer US dol­lar also as­sisted the metal yes­ter­day.

Bjarne Schiel­d­rop, chief commoditie­s an­a­lyst at Swedish bank SEB, said gold could test an all-time high of $1,920 an ounce if the trend con­tin­ued.

“Gov­ern­ments all around the world will now spend money they don’t have, and in­ter­est rates will stay close to zero and real rates will likely be neg­a­tive for an ex­tended pe­riod,” he said. “These are all very bullish in­gre­di­ents for the gold price.”

It came as eq­uity markets in Europe closed in the red, with Lon­don per­form­ing slightly bet­ter than its coun­ter­parts in the bloc.

The FTSE 100 closed 0.6pc lower at 6,156.2 while the do­mes­ti­cally fo­cused

FTSE 250 fell 0.95pc to 17,185.2 as the Chan­cel­lor’s sum­mer state­ment failed to ex­cite traders. The gov­ern­ment

as­sis­tance pro­vided to the hos­pi­tal­ity and hous­ing sec­tors seemed to have lit­tle af­fect on shares, with leisure com­pa­nies and house­builders end­ing the day flat.

Per­sim­mon climbed 21p to £24.33

and Bar­ratt Devel­op­ments slipped

6.4p to 522p.

Mean­while, Restau­rant Group, which ini­tially jumped on the back of the news, closed 2.4p down at 55.9p, a fall of 4pc.

Else­where, water com­pany Pen­non edged 9p higher to £10.77 af­ter it an­nounced it had com­pleted the dis­posal of its waste man­age­ment group Viri­dor, net­ting £3.7bn in cash.

The FTSE 100 com­pany said it had re­alised “sig­nif­i­cant strate­gic value” from the sale, adding it “will now fo­cus on its sec­tor-lead­ing water and waste­water busi­nesses, whilst con­sid­er­ing fur­ther growth op­por­tu­ni­ties that cre­ate value for cus­tomers, em­ploy­ees and share­hold­ers”. It plans to use the funds to cut down its debt pile from £1.2bn to £300m in the com­ing months, make re­turns to share­hold­ers and also fund growth op­por­tu­ni­ties that may arise.

Along­side the an­nounce­ment, Pen­non said the end of its strate­gic re­view was a “nat­u­ral point” for lead­er­ship change, an­nounc­ing the ap­point­ment of cur­rent chief fi­nan­cial of­fi­cer Su­san Davy as chief ex­ec­u­tive.

When she takes up the role at the end of July, she will be­come the FTSE 100’s eighth cur­rent fe­male chief ex­ec­u­tive – equal to the pre­vi­ous high. Its shares rose 9p to £10.77.

There were few notable moves on the FTSE 250 yes­ter­day. Soft­ware group Mi­cro Fo­cus un­der­went a dead cat bounce, ris­ing 10.6p to 363.4p fol­low­ing Tues­day’s near-20pc losses. The big­gest mid-cap faller was

FirstGroup, which plunged more than a fifth, or 11.3p to 37.8p, af­ter the trans­port group flagged a “ma­te­rial un­cer­tainty” over its abil­ity to con­tinue as a go­ing con­cern due to risks around the pan­demic.

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