Boris Johnson

Boris Johnson – pardon, Alexander Boris de Pfeffel Johnson – became the Prime Minister of the United Kingdom in July 2019, after Theresa May resigned.

But who is Boris Johnson? As his full name suggests, and contrary to his populist agenda, he is actually a member of the British elite, educated in the prestigious Eton College. Johnson was a journalist but was sacked for falsifying a quotation. He later worked for The Daily Telegraph, also making dubious claims. So do not expect full truthfulness from Boris.

In 2001, he became the member of Parliament, while in 2008, he was elected the Mayor London, just to be re-elected in 2012. More recently, Johnson became a prominent figure in the successful Leave campaign during Brexit and the main supporter of the hard Brexit.

Boris Johnson and Gold

We do not know whether Boris possesses any gold. But what we do know is that Boris Johnson – known mainly for mop of blonde hair even Donald Trump could be jealous for – takes office at one of the most tumultuous junctures in post-war British history.

What will emerge from his leadership is yet to see, but Johnson could make gold soar on renewed turbulence related to the Brexit. In his first speech as the prime minister, Johnson said that “We will come out on 31 October, no ifs and no buts. We will do a new deal and a better deal.” So, we could see Brexit without any deal, which would be fundamentally the best scenario for gold.

So far, the reaction of the precious metals market to Johnson being the new prime minister was muted, but it was well telegraphed. But the future might be more positive for the gold prices. As one can see in the chart below, uncertainty around Brexit gave gold a strong boost back in 2016.

Chart 1: Price of gold in U.S. dollars (blue line), euros (yellow line) and British pounds (red line) after the Brexit vote.

Gold prices in US Dollar, Euro, British Pound

Of course, Johnson’s action could be negative for the gold prices as well, if he, for example, delivers a quick and well-organized Brexit (or if there will be no Brexit at all). Gold may also suffer, if the Brexit drama will strengthen the U.S. dollar.