Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold declines but Brexit political uncertainty limits losses

Published 06/30/2016, 08:47 AM
Updated 06/30/2016, 08:47 AM
© Reuters.  Gold falls but Brexit political uncertainty limits losses

© Reuters. Gold falls but Brexit political uncertainty limits losses

Investing.com - Gold prices were lower in North American trade on Thursday, holding on to modest overnight losses, as investors continued to digest the political and economic aftermath of the U.K.’s decision to leave the European Union.

Former London mayor Boris Johnson abruptly pulled out of the race to become Britain's next prime minister on Thursday, in a shock move that upturned a political order shaken by last week's vote to leave the European Union.

Meanwhile, Britain’s Justice Secretary Michael Gove, one of the main campaigners to take Britain out of the EU, said on Thursday he would run to become prime minister. Interior Minister Theresa May, who campaigned to remain in the EU, also announced her candidacy to lead the party.

Other Conservative Party politicians to declare they are standing to replace Cameron so far are Welsh Secretary Stephen Crabb and Defence Secretary Liam Fox.

Gold for August delivery on the Comex division of the New York Mercantile Exchange shed $5.15, or 0.39%, to trade at $1,321.75 a troy ounce by 12:45GMT, or 8:45AM ET. A day earlier, prices tacked on $9.00, or 0.68%.

Prices of the yellow metal surged to a 27-month peak of $1,362.60 last Friday, after a shock U.K. vote to exit the European Union sent investors flooding into bullion and other safe haven assets.

The news raised concerns that other countries might leave the union and that global growth would come under significant pressure, while the actual timeframe of the U.K. departure from the EU remained unclear.

But so far the U.K. has refrained from invoking Article 50, the treaty measure that would jump start the two year deadline for the U.K. to leave the European Union.

Investors will be watching a speech by Bank of England Governor Mark Carney at 15:00GMT, or 11:00AM ET, when he is expected to address concerns over the U.K.'s decision to leave the EU.

The precious metal is up almost 25% for the year to date, boosted by concerns over global growth in wake of the Brexit vote and as market players pushed back expectations for the next U.S. rate hike.

Market players all but ruled out further rate hikes by the Federal Reserve this year in the aftermath of Britain’s shock vote to leave the EU. In fact, futures markets are now reflecting a chance that the Fed could actually cut interest rates before the end of the year, instead of hiking them.

According to the CME Fed Watch tool, there’s currently a 0% probability of a Fed rate hike in July and a 3% probability of a rate cut.

Data released earlier showed that weekly jobless claims rose by 10,000 last week to 268,000. Analysts expected jobless claims to increase by 9,000 to 267,000 from the previous week’s total of 258,000.

A report on business activity in the Chicago region is due at 13:45GMT, or 9:45AM ET.

Elsewhere on the Comex, silver futures for September delivery inched up 10.6 cents, or 0.58%, to trade at $18.50 a troy ounce during morning hours in New York, while copper futures tacked on 0.2 cents, or 0.09%, to $2.188 a pound.

Latest comments

tgt1 hitted in xag again today alsooooo.....and wait for tgt2 above $18.750 range and wait for above tgt $1330 in xau also.mm----see yesterday and todays buy call 1stttttttt
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.