Investing.com -- Gold fell slightly on Tuesday taking a pause from the Brexit-inspired rally, as investors looked to lock into profits days after the precious metal surged to 27-month highs.
On the Comex division of the New York Mercantile Exchange, Gold for August delivery traded between $1,308.00 and $1,329.55 an ounce, before closing at $1,317.45, down $7.25 or 0.55% on the session. Last Friday, the front month contract for Gold soared by nearly $100 an ounce to eclipse $1,360 an ounce, enough to hit a 2-year high. Since opening the year near $1,075 an ounce, Gold has skyrocketed more than 20%. With two days left in June, Gold is on pace for its strongest first half of a year in more than a decade.
Gold likely gained support at $1,247.30, the low from June 8 and was met with resistance at $1,344.00, the high from February 26, 2014.
In the frenzied days since last week's surprising decision by voters in the U.K. to approve a referendum paving the way for a departure from the EU, Gold has largely avoided a major sell-off, as traders continue to seek shelter in safe-haven assets. On Monday, Gold remained supportive in broad risk-off trade while investors took part in a flight to safety from plunging euro area bank stocks. Consequently, Gold has become a preferred option for rattled investors along with low-risk government bonds and currencies such as the U.S. Dollar, Japanese Yen and Swiss Franc.
Market players now turn their attention to a closely-watched two-day EU Summit in Brussels for clearer indications on Britain's next steps. While addressing Parliament on Monday, U.K. prime minister David Cameron said that he will not immediately invoke Article 50, a provision of the Lisbon Treaty, which initiates a two-year process for a member state to leave the European bloc. Upon his arrival in Brussels, Cameron told reporters that he would like the process of Britain's departure from the EU to be as "constructive as possible," to avoid complicating the relationship with their key trade partners.
"These countries are our neighbors, our friends, our allies, our partners and I very much hope we’ll seek the closest possible relationship in terms of trade and cooperation and security, because that is good for us and that is good for them. And that’s the spirit in which the discussions I think will be held today," Cameron said.
Meanwhile, top leaders from throughout the euro area appear to be adopting a hard-line stance against the U.K. While addressing the Bundestag, Germany chancellor Angela Merkel rejected a proposal from former London mayor Boris Johnson which would enable Britain to receive access to the European single market while simultaneously enacting a measure that would severely restrict immigration into the U.K. In an interview with CNN, Italy prime minister Matteo Renzi echoed the sentiments.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.35% to an intraday low of 95.93, before rallying to 96.31 in U.S. afternoon trading. A day earlier, the index hit a three-month high as the Pound crashed to a fresh 31-year low against the Dollar.
Dollar denominated commodities such as Gold become more expensive for foreign purchasers when the dollar appreciates.
While Goldman Sachs (NYSE:GS) economist Jeff Currie said on Monday that he still views Gold as a strong hedge, he told CNBC that he sees "limited upside potential" for the yellow metal above $1,300, amid sharp declines in U.S. Treasury yields. At the same time, analysts from HSBC and Societe Generale (PA:SOGN) predicted before the referendum that Gold could eclipse $1,400 if the Leave campaign prevailed.
Silver for August delivery ticked up 0.104 or 0.58% to $17.890 an ounce.
Copper for September delivery surged 0.047 or 2.23% to $2.173 a pound.