Gold Prices Ease On Brexit Day - Gainesville Coins News
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Gold Prices Ease On Brexit Day

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Gold Prices Ease On Brexit Day

Gold prices are easing again this morning, as Britons head to the polls to vote whether to remain in the European Union or not. Traders are betting big on a "Remain" vote, as the British pound sterling hits a high for 2016 against the dollar (up over 1%). The euro is up as much as 1% against the dollar as well.

london-rain

Polls in Britain have been open for three hours already, but horrible weather, including flash flood warnings in London, are expected to suppress turnout among Remain and undecided voters. Leave voters have been far more emotionally invested in the referendum, and are thought to be less likely to be deterred by the weather.

Technical numbers for gold have first resistance at $1,269, then $1,273. First support comes in at $1,260, then $1,253.

Spot gold is trading around $4 lower this morning, while spot silver is down less than a dime. The dollar hit a seven-week low overnight, as oil prices tack on more than 1%. West Texas Intermediate futures contracts are making another run at $50 a barrel, undeterred that US crude stockpiles fell much less than expected. The US Energy Information Administration reported a 917,000 barrel draw, compare to expectations of a 1.7 million barrel draw.

factory

European PMI came in lower than expected, drug down by an economic decline in France. The US flash PMI showed a better than expected rebound, coming in at 51.4 after 6-1/2 year low in May. The reading of 51.4 handily beat the forecast of 50.9. First time jobless claims in the US also surprised pleasantly, falling by a whopping 18,000 applications to record 259,000 newly unemployed. Analysts had expected a drop of only 7,000.

Stocks are higher globally, as traders have locked in expectations of the "Remain" side winning today's Brexit referendum. The enthusiasm isn't very deep, as trading is extremely thin.

dollar-pound-euro

Billionaire George Soros, famous for "breaking the Bank of England" in 1992, warned that a vote to leave the EU will cause a huge devaluation in the pound and throw the UK into a deep recession. He warns that the pound could fall as much as 25%, to parity with the euro. He concludes by saying "Today, there are speculative forces in the markets much bigger and more powerful. And they will be eager to exploit any miscalculations by the British government or British voters. A vote for Brexit would make some people very rich – but most voters considerably poorer."

 

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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