August Gold settles 1322.4, up $27.60 for the week ended June 24, 2016
Brexit!! What else is there to say? Thursday’s surprise vote sent global indices spiraling lower with gold, the dollar, and Treasuries the beneficiaries as investors sought safe havens amid a budding crisis. The British referendum on saying good bye to the EU will take a few years to unwind but it told investors two things. First, that any Fed rate hike in July and most likely September will surely be taken off the table. Second, that the British referendum could urge other EU nations to take similar action to exit the union. Regardless of a domino theory effect down the road, the stock market had its worst session since 2011 as investors were clearly caught off guard with the surprise vote, dumped positions.
Prior to the Brexit vote recent longs had booked profits this week sending prices down to a weekly low of 1252.8 basis August futures as they took cover ahead of the vote. However the dips were short lived and multi year highs were scored as gold traded up to a two year high at 1362.6 in panic buying before retreating to settle well above 1300.0 an ounce and new highs for 2016 during Friday’s session. Until equities find a bottom, the precious metal market should continue to churn higher. Carefully buy the dips in the market going forward. Those looking for a trade idea in both gold and silver may consider the following. Look at buying the December gold 1450 call and sell 2 Dec gold 1600 calls for 4 points or in cash value $400.00 plus commissions and fees. For silver look to buy the Dec silver 19 call and sell 2 Dec silver 21.50 calls for 5 pts or in cash value $250.00 plus commissions and fees.