Investing.com -- Gold retreated from 22-month highs on Friday amid heavy profit taking, as officials suspended Brexit campaigning for a second consecutive day following the tragic death of a Parliament member, throwing next week's closely-watched referendum into limbo.
On the Comex division of the New York Mercantile Exchange, Gold for August delivery traded in a broad range between $1,279.50 and $1,299.15 an ounce before settling at $1,293.45, down $4.95 or 0.39% on the session. It came one session after Gold surged nearly 2% to eclipse $1,310 an ounce, hitting its highest level since August, 2014. With the mild losses, Gold halted a streak of seven-day winning streak. The precious metal has still surged more than 21% since the start of the year and is on pace for its strongest first half in more than a decade.
Gold likely gained support at $1,199.00, the low from May 31 and was met with resistance at $1,337.90, the high from July 11, 2014.
On Friday, a series of events ahead of next week's Brexit referendum were cancelled, as U.K. residents continued to mourn Jo Cox, a Labour Party member who was shot and stabbed to death in North Yorkshire a day earlier. Cox, who was elected to the House of Commons last year, had openly campaigned for the "Remain" camp in recent weeks. It marked the first killing of a Parliament member in two decades. Out of respect for Cox, several public opinion polls and a report by the International Monetary Fund were delayed until the weekend.
Voters in the U.K. appear to be evenly split on whether to support a departure by the U.K. from the European Union. While the "Remain" campaign held as much as a 70-30 lead several months ago, the "Leave," vote has surged ahead in several prominent polls this week. Still, the British sportsbook Betfair helped assuage concerns of a Brexit by reporting that approximately 65% of the wagers it has handled have come in for the "Remain," side. In recent weeks, British prime minister David Cameron, Federal Reserve chair Janet Yellen, IMF managing director Christine Lagarde and Bank of England governor Mark Carney have warned of the serious ramifications a Brexit could have on global financial markets. On the other end, House of Commons Leader Chris Grayling, Culture Secretary John Whittingdale and former London mayor Boris Johnson have shown support for the Leave movement.
Meanwhile, investors continued to digest the Fed's decision earlier this week to leave the target range on its benchmark Federal Funds Rate unchanged at a level between 0.25% and 0.50%. At the same time, six members of the FOMC recommended one interest rate hike before the end of this year, up from one in March. Last December, the FOMC forecasted in its quarterly economic projections. that it could raise rates as much as four times in 2016.
St. Louis Fed president James Bullard said Friday that the U.S. central bank may only need to raise rates once over the next two and a half years, amid a historically low interest rate environment among other top central banks worldwide. By comparison, both the European Central Bank and the Bank of Japan left key interest rates in negative territory earlier this month. Bullard's comments represent a stark departure from his position less than a month ago when he argued at a speech in Singapore that keeping rates too low for an extended period could "feed into future financial instability."
Investors who are bullish on Gold are in favor of a gradual tightening of monetary policy by the Fed. Gold, which is not attached to interest rates, struggles to compete with high-yield bearing assets in rising rate environments.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.45% to an intraday low of 94.17, its lowest level in a week. The index is down by more than 5% since early-December.
Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for July delivery plunged 0.232 or 1.32% to $17.375 an ounce.
Copper for July delivery inched up 0.002 or 0.10% to $2.050 a pound.