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Gold Price Steady Awaiting Brexit

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Gold Price Steady Awaiting Brexit
brexit-question

Gold prices are trending near a two-week low, as global markets hold their collective breath over tomorrow's Brexit vote. Trader have been in a risk-on mood the last few days, buoyed by opinion polls that show the "Remain" side slightly ahead of the "Leave" side. On the other hand, a large number of voters remain undecided on the eve of  the referendum. This means that the results are too close to call.

FX Street posted the results of the latest Survation poll – the last ahead of the vote –  showing fully 11% of voters were still undecided (or embarrassed to tell a stranger which side they favor.) The poll has 45% remain, 44% leave, and 11% undecided. As it has been with most recent polls, the results were inside the margin of error.

Technical numbers for gold this morning show resistance at $1,268 and $1,273. Support is seen at $1,262 and $1,256.

The dollar is lower this morning, with the pound and euro scoring solid gains. In Asia, the yen is up slightly against the dollar, while the yuan is lower. Oil prices are up slightly on the weaker dollar, with WTI futures trading just above $50 a barrel again.

Wall St. opened modestly higher, following the lead of European stocks.

 

Tuesday's Markets

Gold prices dropped for a third straight session Tuesday, as investors became wedded to the idea that the Brexit vote would end with the status quo preserved. August gold futures fell $20.80 (1.6%) to settle at $1,271.30 an ounce. Spot gold ended the day down $22.30 (1.73%) to close at $1,267.70, $3 off the low for the day.

Oil_Derrick

Oil futures logged their first loss in three sessions Tuesday, with August crude down 11 cents (0.2%) to settle at $49.85. Brent futures shed a tiny 3 cents to end at $50.62. Oil prices got a late boost when industry trade group American Petroleum Institute reported a big 5.2 million barrel drawdown of US crude stockpiles. This number should be approached skeptically, though, as the API estimate has been wildly off from the official Energy Information Administration numbers for several weeks now.

The dollar got a reprieve Tuesday, when the pound reverse early gains that propelled it to a 5-1/2 month high in early trading. The yen also dropped noticeably, as safe haven demand for the Japanese currency abated.

Stocks had an up-and-down day on Wall St. yesterday, closed mixed. The Dow closed up a mere 0.1%, the S&P 500 gained 0.3%, while the Nasdaq fell 0.1%.

 

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

About the Author

Everett Millman

Steven Cochran

Precious Metals Market Analyst
BS University of South Florida (2002)

A published writer, Steven's coverage of precious metals goes beyond the daily news to explain how ancillary factors affect the market.

Steven specializes in market analysis with an emphasis on stocks, corporate bonds, and government debt. He writes a monthly review of the precious metals markets for SurvivalBlog.com.

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