After an up-and-down trading day on Thursday, the spot gold price was back above $1,290 per ounce on Friday morning. The yellow metal is on track for its third consecutive week of positive movement due to a combination of economic uncertainty and central bank ineptitude.
Meanwhile, silver was over 1% higher during early trading, and is once again approaching $17.50/oz. Prices for platinum and palladium—with their close ties to industry—were each modestly lower.
Thursday's Roller Coaster
When markets opened yesterday, it looked like the precious metals were poised to break out in earnest. Spot gold quickly rallied better than $20 per ounce to a new two-year high in terms of dollars. (In pounds sterling and euros, it actually notched three-year highs.) Prices touched above $1,310/oz while spot silver surged to a fresh eight-week high just shy of $18/oz.
Then the profit-takers swooped in.
Around 11 am ET, the precious metals all saw steep declines that dragged prices all the way into negative territory. Gold plunged back near $1,280/oz and silver slipped back to about $17.15/oz, a far cry from where they were trading during the morning.
Though many in the bullion industry were left scratching their heads, the simple explanation was that many speculators were taking profits off the table with such a swift rally in front of them. This made sense given that gold prices had advanced $100 per ounce in a span of just three weeks. Many traders were happy to take profits at that point, especially those who had bought in when gold dipped as low as $1,210/oz in May.
More Tragedy Pauses Brexit Talk
The looming risk that Britain decides to abandon its membership in the European Union in a referendum scheduled for next Thursday has been one of the main drivers of the safe haven appeal for gold and silver. However, Brexit campaigning was suspended yesterday after British MP Jo Cox was brutally murdered in broad daylight yesterday morning. Cox was shot several times and stabbed by a lone attacker before the man was apprehended; she later died from her injuries.
With the global public still nursing fresh wounds from the terror attack in Orlando, Florida that left as many as 50 dead, the senseless killing of a public figure has left many shell-shocked. While both sides of the Brexit question fittingly agreed to suspend their public lobbying efforts in the wake of the murder. The attacker was supposedly ardently pro-Brexit, a fact that may impact the perception of the "Leave" side of the debate. There are no plans to postpone the referendum as of yet.
There appears to be strong technical support at the $1,289/oz level and $1,279/oz (yesterday's low) below that. Resistance has shown up at the $1,295/oz mark, while $1,300/oz is a natural resistance point, as well. If prices break above this key level, the yellow metal will carry some serious momentum into next week.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.