Investing.com -- Gold fell slightly but ended June with one of its strongest first halves on record, after Mark Carney strongly hinted that the Bank of England could ease monetary policy later this summer sending the Pound lower versus the dollar.
On the Comex division of the New York Mercantile Exchange, Gold for August delivery traded between $1,315.00 and $1,325.65 an ounce, before closing at $1,320.25, down 6.75 or 0.51% on the session. Gold has remained near 27-month highs throughout the week after surging nearly $100 an ounce last Friday to eclipse $1,360. Since opening the year around $1,075, Gold has soared nearly 25% over the last six months, amid heightened concerns of a global recession and a delayed interest rate hike from the Federal Reserve.
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 London, the Pound fell sharply and U.K. government bond yields sunk to fresh record lows after Carney emphasized that the BOE could lower interest rates in the coming months to safeguard the economy from further shocks emanating from last week's Brexit decision. Earlier this week, Goldman Sachs Group Inc (NYSE:GS) said in a note to investors that the decision from U.K. voters to approve a departure from the European Union could tip the nation's economy into recession by early-2017. U.K. prime minister David Cameron expects to step down by early-September and plans to leave the option of invoking Article 50 of the Lisbon Treaty to his successor.
Delivering his second public address since last week's shocking Brexit outcome, Carney noted that there was evidence that "uncertainty was holding back major economic decisions," ahead of the historic vote. The BOE has left interest rates steady since 2012 and held its benchmark interest rate at a record-low of 0.5% in every meeting dating back to 2009. While the BOE meets next in July, Carney hinted that the central bank could wait until August to loosen policy.
"It now seems plausible that uncertainty could remain elevated for some time,” Carney said. "The economic outlook has deteriorated and some monetary policy easing will likely be needed over the summer."
Following Carney's comments, GBP/USD extended earlier losses to touch down to an intraday low of 1.3215, down by more than 1.40% on the session. On Monday, the Pound Sterling fell to fresh 31-year lows of 1.3118 against its American counterpart, completing its worst two-day sell-off in history. Since hitting a 2016-yearly high at 1.5020 ahead of the Brexit results, the Pound has tumbled nearly 10% against the Dollar.
In the U.S., initial jobless claims rose by 10,000 to a slightly stronger than expected 268,000. The four-week moving average, however, remained unchanged at 266,750, down roughly 10,000 from its level a month ago. Investors await a critical U.S. employment report on July 8 for further indications on the strength of the labor market. In May, the economy added 38,000 nonfarm payrolls, its lowest monthly total in nearly six years.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.50% to an intraday high of 96.46, before falling slightly back to 96.19 in U.S. afternoon trading. After plunging nearly 5% over the first three months of the year, the index is on pace to rebound approximately 1.6% over the second quarter.
Over the first 11 weeks of the year, the precious metal completed its largest sustained weekly inflow since the Financial Crisis, as investors poured $13.4 billion into Gold assets, according to Bank of America Corporation (NYSE:BAC). It came as a China-fueled rout rattled global equity markets and a surprising decision from the Bank of Japan to lower rates into negative territory, sent investors scurrying toward the safe-haven asset. Dollar denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for August delivery gained 0.216 or 1.17% to close at $18.623.
Copper for September delivery added 0.006 or 0.27% to $2.192 a pound.