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Gold prices ease in Asia as investors book gains, await fresh cues

Published 06/29/2016, 07:35 PM
Updated 06/29/2016, 07:37 PM
© Reuters. Gold falls in Asia

Investing.com - Gold prices drifted lower in Asia on Thursday as investors booked recent gains and awaited fresh cues on Britain's efforts to navigate an exit from the European Union.

On the Comex division of the New York Mercantile Exchange, gold for August delivery traded eased 0.73% to $1,317.25 a troy ounce.

Silver futures for August delivery declined 0.41% to $18.332 a troy ounce, while copper futures for September delivery held flat at $2.196 a pound.

Overnight, gold rose considerably on Wednesday, amid a weaker dollar, as the long-term ramifications stemming from last week's historic Brexit referendum remained in focus.

Since Brexit polls closed last Thursday night in Britain, Gold has soared more than $60 an ounce or 4.5%. At session-highs last Friday, the precious metal eclipsed $1,360 to hit its highest level in 27 months. With one day left in June, Gold is up by more than 20% since the start of the year and is on pace for its strongest first half of a year in more than a decade.

In Brussels, European Council president Donald Tusk told reporters outside the EU Summit that it will not start the divorce process on any future negotiations with the U.K. until the country invokes Article 50 of the Lisbon Treaty. It came one day after U.K. prime minister David Cameron said he will leave the task to his successor when he steps down from the position by early-September. Once the U.K. summons Article 50, it will initiate formal negotiations with the European Union to leave the European bloc, a process which is expected to take a minimum of two years.

Over the last week, investors have piled into safe havens such as gold and government bonds, while engaging in a flight to safety from the crashing Pound. While the Pound Sterling rose by more than 1% against the U.S. Dollar on Wednesday to an intraday high of 1.3533, it still remains near 31-year lows from earlier this week in the aftermath of the shocking decision by U.K. voters. Over the last week, GBP/USD has tumbled by nearly 10%.

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