![Brexit Withdrawal Agreement Timeline: Impact on Gold Prices (2016 – 2020) [UPDATED]](https://www.bleyerbullion.co.uk/wp-content/uploads/2020/02/Header-2020-Brexit.jpg)
Editors note: This article was last updated following the UK leaving the EU on the 31st January 2020 and entering into the transition period.
We hope you’ll find this rollercoaster-of-a-timeline valuable. We thought it would be interesting to see just how this whole process has affected gold prices since the referendum result in 2016. Gold is often used as a safeguard investment in times of uncertainty so this should give you an insight into how the markets reacted to the news as it unfolded. We’ll go into a bit about each event, list other important events around that time and show you how this news had an effect on gold prices.
Key Brexit dates that affected gold prices:
- Referendum results (23rd June 2016)
- Article 50 triggered (29th March 2017)
- First round of negotiations begin (19th June 2017)
- Second round of negotiations complete (20th July 2017)
- Third round of negotiations begin (28th August 2017)
- Establishing UK’s Brexit position in Florence (22nd September 2017)
- New Secretary of State for Exiting the European Union (9th July 2018)
- UK Government Brexit White Paper released at Chequers (12th July 2018)
- No deal preparations begin (23rd August 2018)
- Withdrawal agreement is published (14th November 2018)
- MPs begin Brexit debates (4th December 2018)
- Theresa May returns to Brussels (11th December 2018)
- Withdrawal deal is rejected in House of Commons (15th January 2019)
- Withdrawal deal ‘Plan B’ presented (21st January 2019)
- Withdrawal deal ‘Plan B’ rejected (12th March 2019)
- Extension of Article 50 to 14th April 2019 (21st March 2019)
- Withdrawal deal rejected for third time (29th March 2019)
- Further extension requested to October 2019 (11th April 2019)
- New Prime Minister Boris Johnson (24th July 2019)
- Parliament is prorogued (9th September 2019)
- Prorogation of parliament is suspended (24th September 2019)
- General election campaign commences (6th November 2019)
- General election result (13th December 2019)
- Process deadline of December 2020 confirmed (17th December 2019)
- MPs pass withdrawal agreement bill (20th December 2019)
- Britain leaves EU and enters transition period (31st January 2020)
Below is our Brexit timeline and how it has impacted gold prices from 2016 – 2020:
1. The Referendum result
23rd June 2016
Let’s go back to the beginning. The result of the United Kingdom European Union Referendum of 2016 was a victory for the ‘Leave’ campaign, amassing a total of 51.9% of the vote. The referendum was first put to a public vote because Prime Minister David Cameron had rejected calls for a referendum on his country’s continued membership of the E.U. in 2012, but announced less than a year later that his Conservative government would hold one if re-elected in 2015. After losing the ‘Remain’ campaign, David Cameron resigned. It was down to his successor, Theresa May, to pick up the torch of responsibility and lead the negotiation process.
Gold prices
This unexpected result sent shockwaves through the markets. All polls and predicted that remain would win. Gold prices shot up from £851.27 on the Thursday to £999.13 the following Monday. Investors who bet on the outcome of the referendum would have profited nicely from this considerable price jump.
Other key events likely to affect markets during this time
The Eurozone released data on private sector business activity, the U.S. released data on initial jobless claims and new home sales, and IFO Institute reported on German business climate.
2. Article 50 triggered
29th March 2017
Nine months after the referendum, Prime Minister Theresa May triggered the official mechanism that made Article 50 of the Lisbon Treaty a reality. A letter was signed triggering the process before May made a statement of unity to the country. She also addresses the House of Commons to explain her Brexit process to the House.
Gold prices
Investors knew that this was the first stage of the leaving process, so markets didn’t react unexpectedly and supported a general bullish upward trend. Gold prices stalled around this time however, slightly dipping down from £999.55 to £998.90.
Other key events likely to affect markets during this time
The UK published data on net lending, Germany and Spain released preliminary data on inflation and the U.S. released a report on pending homes sales.
3. First round of negotiations begin
19th June 2017
David Davis, the UK’s Secretary of State for Exiting the European Union, arrived in Brussels to begin talks with Michel Barnier, the Chief Negotiator appointed by the European Commission. The lead negotiators, pose for the cameras before several hours of initial discussions. David Davis struck an upbeat tone, insisting that the recent terrorist attacks and fires in Europe showed how the continent could still come together in moments of crisis.
Gold prices
Markets remained uncertain at this point, but gold was already in a downward trend. Many suggested that the UK led with a weaker negotiation attitude which made the Pound Sterling drop around this time. Markets responded and rushed to safeguard, pushing gold slightly higher from £977.64 to £983.22.
Other key events likely to affect markets during this time
New York Fed President William Dudley and Chicago Fed President Charles Evans made public appearances, with Fed Vice Chair Stanley Fischer, Boston Fed President Eric Rosengren and Dallas Fed President Rob Kaplan delivering comments from the federal reserve.
4. Second round of negotiations complete
20th July 2017
After the second round of negotiations, and although on a somewhat of a positive note, David Davis’s speech didn’t fill investors and business-owners with much hope that the talks had been particularly constructive, and was vague about what had been arranged. During the second round of negotiations, issues such as citizens’ rights, the financial settlement and the border between Ireland the Northern Ireland, as well as other separation issues, such as Euratom, EU external agreements and dispute resolution, would have been agreed. But there was little evidence of an agreement on any of these issues, and the UK was asked for more clarification on the next round of talks.
Gold prices
This aloofness in rhetoric was felt. Gold was in an upward trend anyway, so this news supported gold prices and saw them increase slightly higher from £954.34 to £960.33 during this time.
Other key events likely to affect markets during this time
The UK reported its retail sales, Australia released an employment report and private sector data on business confidence, The Bank of Japan announces a new interest rate, The ECB announced its latest monetary policy decision and President Mario Drahi holds a press conference.
5. Third round of negotiations begin
28th August 2017
This round of talks discussed future relations, an EU-UK trade agreement, and transitional arrangements. Again, EU comments from Michel Barnier didn’t help market sentiment, who urged that the UK started “negotiating seriously”.
These comments threw the talks into doubt. At this point, European leaders agreed unanimously that the UK must make sufficient progress on three separation issues before talks could progress to trade. Barnier’s mandate meant that the UK had to reach an agreement on the financial settlement, the Irish border and EU citizens’ rights and a future relationship with the EU. The rhetoric used this time, told investors that there had been progression in the third round of talks on a number of fronts, but it still wasn’t enough to reach solid conclusions.
Gold prices
Barnier’s comments, and again a lack of information for business owners and investors, meant that markets responded by pushing gold prices up sharply from £1,002 to £1,019.63.
Other key events likely to affect markets during this time
Financial markets in the UK closed for holidays during this time, the U.S. reported on consumer confidence, and Canada released data on raw materials price inflation.
6. Establishing UK’s Brexit position in Florence
22nd September 2017
Theresa May needed to bolster morale for negotiations and did so by delivering a speech on Brexit in Florence. She gave clarity in some areas, but none in many others, and did just enough to unblock the stalled Brexit talks. The EU27 wanted promises on money and the other key article 50 points: citizens’ rights and the Irish border, detail on the transition period, and a feasible vision of what Britain wants its future trading relationship to look like. Her speech was polite, non-committal and relayed the government’s wish for a deep and special partnership with the EU once the UK leaves.
Gold prices
As gold prices were on a massive downward trend, this speech did just enough to give investors hope. Gold prices leveled out at this news and saw a tiny decline from £957.48 to £957.20.
Other key events likely to affect markets during this time
U.S. lawmakers arranged a tax-cut budget deal to prevent a government shutdown and North Korea unveils the testing of a hydrogen bomb over the Pacific Ocean.
7. New Secretary of State for Exiting the European Union
9th July 2018
David Davis delivered a heavy blow to negotiations by resigning as Brexit secretary, warning that he would fight any move by the prime minister to make further concessions to Brussels. He told the BBC that he was no longer the best person to deliver the PM’s Brexit plan and claimed that Mrs. May had sold out to Brussels with her new ‘soft Brexit’ strategy saying, “we have given too much away, too easily.” Dominic Raab, a Brexiteer who was previously a minister for housing and planning in the Home Office, was appointed as his replacement. Mr. Raab campaigned for Leave during the referendum, so his approach was welcomed in restoring trust to negotiations.
Gold prices
Gold was already in a big downward trend at this point. News of Mr. Davis’s departure gave an interesting insight into the negotiation procedure and assisted the gold prices in dipping a little further from £947.63 to £946.03.
Other key events likely to affect markets during this time
Bank of England Deputy Governor Ben Broadbent spoke at an event in London and European Central Bank President Mario Draghi gave a testimony about the economy, monetary policy, and virtual currencies before the European Parliament in Brussels.
8. UK Government Brexit White Paper released
12th July 2018
Following on from the notorious Conservative ‘Chequers’ meeting, the UK government published its long-awaited Brexit White Paper. The document was 104 pages long and set out a proposal for the UK’s preferred way forward in negotiations with the EU. The white paper document set out the UK’s plan with five key objectives; the economy, communities, the union, democracy and the UK’s place in the world. This was met with a mixed reaction. Tory Brexiteer Jacob Rees-Mogg said it was a “bad deal for Britain”, and further conservative resignations followed from Ben Bradley, Boris Johnson, Maria Caulfield and Steve Baker.
Gold prices
Gold was already in a big downward decline at this point. This news further supported prices being pushed down further, trending down from £942.13 to £936.92 during that time.
Other key events likely to affect markets during this time
The ECB published minutes of its latest monetary policy meeting, Canada reported on new house price inflation and the U.S released data on consumer price inflation and jobless claims.
9. No-deal preparations begin
23rd August 2018
It’s argued that within negotiations, all options should available at all times. Mr. Raab needed to fortify this position and establish negotiating power by mentioning preparations for a ‘no-deal’ Brexit. To some politicians, a no-deal option was unnacceptable. To some other politicians, the deal being offered was unacceptable. The media released further no-deal preparation stories of Britain stockpiling resources in preparation for this.
Gold prices
Indicators of a hard Brexit gave the markets some turbulence and drove investors to safeguard their investments. The gold prices jumped up during this time, rising from £925.15 to £929.75.
Other key events likely to affect markets during this time
ECB President Mario Draghi spoke at an event in Germany, the Eurozone released data on manufacturing and service sector activity, Dallas Fed President Robert Kaplan spoke publically and the U.S released data on new home sales.
10. The withdrawal agreement is published
14th November 2018
The Brexit withdrawal agreement was published on the 14th of November and was, again, met with hostility. The outline agreement was published after the text was agreed by the Cabinet, but subsequently two cabinet ministers – Brexit secretary Dominic Raab and work and pensions secretary Esther McVey – resigned, saying that they could not support the deal.
The contents of the withdrawal agreement included the UK remaining in a customs union as a way of avoiding a hard Irish border while a long-term trade deal is agreed. This ‘backstop’ was its biggest point of discourse. It meant that Northern Ireland will also have to stay in parts of the EU single market, thereby tying it closer to Brussels than the rest of the country. Theresa May assured the house by saying that the agreement on a long-term trade deal would mean this would never be used.
Gold prices
This news supported the uptrend average seen in gold markets during that time. Gold prices made a massive leap from £926.41 to £947.60.
Other key events likely to affect markets during this time
The Eurozone, Germany and Japan released preliminary data on third-quarter growth, China published figures for fixed asset investments and industrial production, Fed Chairman Jerome Powell made a speech, and the U.S. released data on consumer price inflation.
11. MPs begin Brexit debates
4th December 2018
Finally, the Brexit debates in the House of Commons begin. It was clear that reaching a majority was going to be a difficult challenge. There were many different views across the house and MPs seemed to have their own opinion as to what they thought was best for the UK and their constituents.
Gold prices
At the time, there was fear that the rejection of this deal could see Britain leave the EU with no agreement at all, with some economists warning of another major recession. This bolstered gold prices, and as the debates began, gold rode a bullish uptrend, edging up from £969.81 to £970.90.
Other key events likely to affect markets during this time
The Bank of England Governor Mark Carney testified about the Brexit Withdrawal Agreement before the Treasury Select Committee, The Reserve Bank of Australia announces its benchmark interest rate, the UK released data on construction sector activity, and New York Fed head John Williams spoke publically.
12. Theresa May returns to Brussels
11th December 2018
After listening to MPs and accounting major resistance within the house on her proposed withdrawal agreement, Theresa May abruptly postponed her ‘Meaningful Vote’ to seek further concessions from the EU. The main concern in her proposal was about the Northern Irish backstop arrangements. Perhaps this was another tactic used by the PM to pass time, with European Commission President Jean-Claude Juncker making it very clear that “the deal we have achieved is the best deal possible, it’s the only deal possible.”
Gold prices
This uncertainty pulled markets into limbo, waiting for news on any concessions. Gold prices dwindled and hovered from £989.81 to £990.16 before seeing big downward fall.
Other key events likely to affect markets during this time
The UK published its latest employment report, The ZEW Institute reported on German economic sentiment, and the U.S. produced figures on producer price inflation.
13. Withdrawal deal rejected in House of Commons
15th January 2019
As the Brexit deal was debated in The House of Lords, MPs in The House of Commons debate the execution of withdrawal agreement proposal. Still encountering resistance and rebels making themselves known within the Conservative party, the agreement gets defeated by 230 members of parliament, 100 of which were Conservative MPs. This massive loss drove the leader of the opposition to move a motion of no confidence in the Prime Minister.
Gold prices
This gave the markets some positive sentiment and drove investors to other investments. Gold prices declined slightly from £1006.59 to £1005.80 during this time.
Other key events likely to affect markets during this time
European Central Bank President Mario Draghi spoke at an event in Strasbourg, the U.S. released figures on producer price inflation and Kansas City Fed President Esther George spoke publically.
14. Withdrawal deal ‘Plan B’ presented
21st January 2019
Less than a week after her Brexit plan was defeated in the House of Commons, Theresa May spent a few days in talks with members across all parties to try and break the stalemate. She devises a ‘Plan B’ agreement, which some argued was the same as the recently-rejected deal. In May’s statement, she said it was “clear the government’s approach had to change. And it has.” Yet, by the time the statement ended, it was unclear how.
Gold prices
This steadied gold prices from a bearish downtrend. Gold prices still went down but the dip was only slight, taking gold prices from £994.58 to £993.05.
Other key events likely to affect markets during this time
The U.K. published its latest employment report along with data on net lending, China released data on fourth-quarter growth, as well as figures on investment and industrial production and U.S. financial markets were closed for a national holiday.
15. Withdrawal deal ‘Plan B’ rejected
12th March 2019
The ‘Plan B’ agreement gets voted on in the house, but the Irish backstop has still been unresolved. Many Conservative MPs feared that the it could leave the UK wedded to EU customs rules indefinitely, and the DUP stating that it would create unacceptable border checks between Northern Ireland and Great Britain. This led to the withdrawal agreement being defeated again by 45 votes.
Following on for this, the prime minister said she would now meet with MPs to hear their concerns over Brexit and would be more open with parliament about the next stage of the Brexit process.
Gold prices
This uncertainty made gold rise sharply from £987.41 to £992.92.
Other key events likely to affect markets during this time
The U.K produces data on GDP growth and manufacturing production, the U.S. reports on consumer inflation, and Fed Governor Brainard is to speak at an event in Washington.
16. Extension until 14th April 2019
21st March 2019
The rejection of ‘Plan B’, and with the imminent Brexit deadline approaching, still no conclusions had been reached. PM Theresa May invited to meet with party leaders to work out alternatives. These MPs later appeared saying that there was no flexibility, no negotiations, and nothing in the agreement had changed. This meant that the UK government had to go back to the EU to ask them for a short-term extension to see if any advancements could be made on the withdrawal deal. This short extension gave the house an opportunity to take a series of indicative votes to see if there was any majority verdicts on how to proceed.
Gold prices
As a ‘hard’ Brexit was looking less likely now, investors weren’t in a rush to safeguard. Gold prices dipped slightly from £1000.85 to £997.04 during this time.
Other key events likely to affect markets during this time
The U.K. reported figures on retail sales and public sector borrowing, the Bank of England announced its latest interest rate decision, Australia published employment data, New Zealand released data on fourth-quarter growth and The Swiss National Bank announced its latest monetary policy decision.
17. Withdrawal deal rejected for third time
29th March 2019
This was supposed to be ‘Official Brexit Day’, the day the UK would be leaving the EU. After John Bercows throws a spanner in the works by declaring that the same Withdrawal Agreement couldn’t be voted on again for a third time without considerable changes, Theresa May gets around this by excluding the Political Declaration from the Withdrawal Agreement. The Withdrawal Agreement was voted on again in the house, and after a heated debate, the deal was rejected again, with a total of 344 voting against and 286 voting in its favour, the motion loses by 58 votes. The default position now was the UK leaving on April 12, with or without a deal.
Gold prices
Gold prices were riding a downward trend, and as this news unfolded, it supported the price dip, bringing gold from £993.89 to £986.98.
Other key events likely to affect markets during this time
Canada produced data on GDP and raw material price inflation, and the U.S reported on personal spending, PCE price index, business activity in Chicago and new home sales.
18. Further extension requested to 31st October 2019
11th April 2019
With still no conclusions coming from the House of Commons, EU leaders agreed to offer the UK an extension on article 50 until 31 October 2019 in a bid to avoid a no-deal arrangement. Donald Tusk, the president of the European council, said that until that deadline, “what happens will be in the hands of the UK”. He said that the UK would remain a friend of the EU and ended his press conference with “please, do not waste this time.”
At this point, we hope that the UK government can come to some sort of arrangement. This overly long extension definitely seems like enough time to come to some form of agreement on how to proceed. Only time will tell.
Gold prices
Reassurance that Britain would still be in the Customs Union and as part of the EU gave markets certainty again. Gold prices jolted down from £986.67 to £980.82.
Other key events likely to affect markets during this time
The U.K. published data on construction sector activity, the Eurozone published preliminary inflation data, the U.S. reported on durable goods orders, and the Bank of Canada Governor Stephen Poloz spoke publically.
19. New Prime Minister Boris Johnson
24th July 2019
After Theresa May announced that she would step down as Prime Minister, a seven-week leadership contest in the conservative party began in which 160,000 Conservative members picked the next prime minister to govern the country. Boris Johnson won 66.4% of the Conservative Party vote and was announced as Prime Minister of the UK, following his defeat of finalist, Jeremy Hunt.
Gold prices
Boris Johnson was an avid endorser of the Vote Leave campaign and his attitude in preparing for no-deal shouldn’t be taken likely. The gold price surged to £1,049.66 following this news and other global events.
Other key events likely to affect markets during this time
Geopolitical tensions continue to rise with Iran, the UK and the US, New Zealand released trade data, Australia produced consumer price inflation data, the Ifo Institute reported on German business climate, the UK published data on construction sector activity, and the Eurozone published preliminary inflation data.
20. Parliament is prorogued
9th September 2019
Boris Johnson’s first few weeks as Prime Minister wasn’t easy. In line with his vision, he set in motion the process to suspend UK Parliament, limiting the time MPs have to block a no-deal Brexit. Parliament was officially suspended for five weeks, with MPs not due back until 14 October, after which, the Queen’s Speech would take place after the suspension, to outline Johnson’s “very exciting agenda”.
Gold prices
This shock-move to the process made markets react. Gold prices declined to £1214.84.
Other key events likely to affect markets during this time
The ECB’s decision on interest rates and monetary policy statement, US CPI change in headline and core consumer prices.
21. Prorogation of parliament suspended
24th September 2019
The supreme court ruled Boris Johnson’s advice to the Queen that parliament should be prorogued for five weeks as ‘unlawful’. The judgment came unanimously from 11 of the Supreme Court judges, following an emergency three-day hearing that exposed fundamental legal differences over-interpreting the country’s unwritten constitution.
Gold prices
As the announcement was made, the price of the pound sterling rose from 1.131 to 1.1339. Gold prices had the same reaction, pulling prices from £1,215.46 to £1,226.97 throughout the day.
Other key events likely to affect markets during this time
The U.K. public sector had a net borrowing review, the UN General Assembly met and the Reserve Bank of New Zealand’s interest rate decision.
22. General election campaign commences
6th November 2019
After much debating and getting nowhere in the House of Commons, a general election is called. Party leaders from the Conservatives (Boris Johnson), Labour (Jeremy Corbyn), Liberal Democrats (Jo Swinson), SNP (Nicola Sturgeon), Plaid Cymru (Adam Price), and Green Party (Jonathan Bartley and Siân Berry).
Gold Prices
Gold prices bear a general downtrend at this point. During the day, however, gold prices rose from £1,152.81 to £1159.39 at the news.
Other key events likely to affect markets during this time
News released that US productivity in surprise decline, The IMF issues a fresh warning that Europe’s economy has weakened in 2019, Germany’s factory orders rise, Softbank pays price for WeWork debacle.
23. General election result
13th December 2019
The Conservatives have emerged with a majority of 80 seats in the Commons – the party’s biggest since 1987. It was Labour’s worst performance since the 1930s with Jeremy Corbyn saying he will not lead Labour into another election. The Liberal Democrats also had a bruising night with their leader Jo Swinson losing her seat to the SNP. The SNP made sweeping gains across Scotland, winning 48 of the 59 seats available. In total, the Conservatives have 365 seats, Labour 203, the SNP 48, the Lib Dems 11, the DUP 8, Plaid Cymru 4, and other parties 11.
Gold Prices
The victory of the conservative party saw gold prices plummet. At one point, it reached as low as £1086.07, the lowest its gone since June 2019.
Other key events likely to affect markets during this time
India’s economy continued to report deepening signs of a slowdown, Germany’s worst manufacturing downturn in a decade, U.S. business debt exceeded that of households for the first time since 1991, Japanese industrial production fell more than expected, and ECB keeps its key interest rates unchanged.
24. Process deadline of December 2020 confirmed
17th December 2019
Boris Johnson marks his election promise to “get Brexit done” by writing into law that the UK will leave the EU in 2020 and will not extend the transition period. The implementation period and the new withdrawal agreement bill will not be extended and will legally prohibit the UK government from agreeing to any extension at all.
Gold Prices
After reports of Johnson’s planned extension law emerged on Monday night, the pound fell more than 0.5% in early Asian trading. It fell down 0.7% from late US market levels. This had a jolt reaction in the gold markets, bringing the prices up from £1,111.04 to £1,122.49.
Other key events likely to affect markets during this time
UK manufacturing suffers the worst quarter since 2009, US manufacturing production rises more than expected, Floodings across the UK, US housing rises more than expected and homebuilder confidence jumps to the highest level in 20 years.
25. MPs pass the withdrawal agreement bill
20th December 2019
The UK takes a pivotal step towards leaving the EU with Boris Johnson’s EU Withdrawal Agreement Bill. The bill passed, with the help of a Conservative majority, with MPs voting 358 to 234 (a majority of 124 in favour of EU Withdrawal Agreement Bill). The bill then goes on for further scrutiny in Parliament.
Gold Prices
This came as little surprise to investors at this stage. Gold prices shifted slightly upwards, rising from £1132.62 to £1136.47.
Other key events likely to affect markets during this time
ONS revises UK GDP growth from 0.3% to 0.4%, US third-quarter economic growth unrevised at 2.1%, new Bank of England governor announced, Whirlpool recalls more than 500,000 washing machines over fire risk.
26. Britain leaves EU and enters transition period
31st January 2020
The UK leaves the European Union after 3 years and 3 Prime Ministers and officially enters the transition period. It is a monumental step for Great Britain and a giant moment in its history. Boris Johnson will have until the end of 2020 to secure a new deal or the UK’s default position will be no-deal. This year will be vital to the process and we will look forward to seeing how it will continue.
Gold Prices
In the lead up to Friday, gold prices were following a general downtrend throughout the week and ending at £1,203.33.
Other key events likely to affect markets during this time
US companies suspend China operations, restrict travel as coronavirus becomes global crisis, US Federal Reserve announces interest rates remain unchanged, Saudi Arabia announces new tourism sector proposals, Russia closes border with China to prevent spread of the coronavirus, Chinese manufacturing PMI as expected at 50.0.
Conclusion
With the new extension and with new developments coming out every week, we can’t predict how the events will unfold and how it will affect gold prices going forward. Physical precious metals are a great safeguard against market instability and economic uncertainty, so if you’d like to get started or simply to discuss your options give Bleyer a call on (01769 618618) or email us at sales@bleyer.co.uk.
