Investing.com -- Gold closed slightly higher on Monday, remaining near two-year highs, as investors continued to engage in a flight to safety amid the fallout of last week's stunning decision by voters in the U.K. to approve a departure from the European Union.
On the Comex division of the New York Mercantile Exchange, Gold for August delivery traded between $1,321.50 and $1,339.30 an ounce, before closing at $1,325.25, up 2.85 or 0.22% on the session. It came one session after Gold soared nearly $100 an ounce to $1,362.45, as markets worldwide were jolted by a surprising outcome in the historic Brexit referendum in the wee hours of Friday morning. Since opening the year near $1,075 an ounce, the precious metal has soared nearly 25% over the calendar year. With three days left in the month of 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 London, U.K. prime minister David Cameron took steps to calm voters nationwide and markets overall after the British Pound fell sharply by more than 3% to tumble to fresh 31-year lows against the U.S. Dollar. At the close of euro area markets, GBP/USD stood at 1.3204, down 3.45%. The Pound Sterling has fallen by approximately 10% since it became apparent that the Leave campaign would prevail last Friday.
In an address before Parliament on Monday afternoon, Cameron emphasized that while the result of the referendum was not the outcome he preferred, it is a decision that he will respect along with the rest of his cabinet. Cameron also said that the U.K. has created a new civil service designed specifically for withdrawal discussions from the EU. While Cameron said last Friday that he plans to leave office by October, his administration announced on Monday that a new prime minister will be put in place by September 2. Cameron emphasized that the domestic economy remains on solid footing due to low, stable inflation and a comparatively low unemployment rate.
In addition, he told Parliament that the financial system is "substantially more resilient" than it was six years, as capital requirements remain 10 times higher than from the Financial Crisis. The U.K. prime minister also reiterated that the Bank of England has set aside an additional £250 billion in liquidity to support the nation's banks and financial markets.
"It is clear that markets are volatile, some companies are considering their investments and we know this will be far from plain sailing. However, we should take confidence from the fact that Britain is ready to confront what the future holds for us from a position of strength," Cameron said in his speech.
"The markets may not have been expecting the Referendum results but the Treasury, the Bank of England and our other financial authorities have spent the last few months putting in place robust contingency plans. The bank stress tests have shown that UK institutions have enough capital and liquidity reserves to withstand a scenario more severe than the country currently faces."
Notably, Cameron told Parliament 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. Though Cameron is expected to deliver a dinner speech on Tuesday at an EU Summit in Brussels, he will not take part in discussions with leaders from the bloc's 27 other nations a day later.
As bank stocks throughout the euro area continued to slide, investors piled into safe havens such as Gold, the U.S. Dollar and low-risk government bonds. Yields on the UK 10-Year fell below 1% to all-time record-lows, while yields on the U.S. 10-Year dipped under 1.50% to approach lows from 2012.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rallied by more than 1% to hit a fresh three-month high at 96.86, before falling back slightly in U.S. afternoon trading. Despite the stellar two-day rally, the index is still down more than 3% since early-December.
Dollar denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for August delivery fell 0.043 or 0.24% to $17.70 an ounce.
Copper for September delivery inched up 0.008 or 0.38% to $2.124 a pound.