U.S. gold futures for August delivery were trading nearly 5% higher this morning around 10 AM ET after hitting highs of $1,362.60 as investors reacted to the British people voting for the country to leave the European Union. Though the vote was predicted to be close, most believed that the country would vote to remain the EU, and the vote to leave was surprising, sending investors to seek refuge in the safety of Gold.
The Brexit benefits gold because of the amount of uncertainty and risk the market is presenting right now, and it is a natural go-to for risk aversion. Gold is one of the few investment vehicles that is in the green today, as global stock markets and currencies are down significant amounts across the board.
U.S. short-term interest rates futures hit contract highs in early trading, which boosts the expectation that the Federal Reserve may cut interest rates to help shield the U.S. economy against possible global fallout. Whether a rate-cut is in the works is questionable, but any raising of interest rates seems to be unlikely in the near future amidst such global uncertainty. The U.S. dollar was surging skyrocketing against foreign currencies as well, another reason the Fed likely will not be raising rates anytime soon.
In addition to Gold’s surge, June Silver Futures were higher by 2.75%, and June Platinum Futures were 1.79 in early morning trading. SPDR Gold Shares (LAGOS:GLD) was also trading around 4.45% higher.
SPDR-GOLD TRUST (GLD (NYSE:GLD
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