by Mark O’Byrne, GoldCore:
Gold prices surged nearly 3% after the very poor jobs number on Friday, have maintained those gains and appear to be consolidating as concerns about the U.S. economy and BREXIT deepen.
Gold was marginally higher yesterday and 2.7% higher last week breaking a run of recent weekly losses and a 5% loss in May.
BREXIT concerns are gaining momentum after three recent polls suggested that the ‘leave’ side are gaining an advantage and a BREXIT looks more likely. An ITV poll showed 45% for “Leave” and 41% for “Remain.” A survey by global market research company TNS showed 43 percent backing an EU exit, and 41 percent wanting to stay in. An online poll showed 48 percent supported leaving the EU, while 43 percent were in favor of remaining and 9 percent were undecided, according to ICM.
This is leading to concerns about a coming period of market volatility and turmoil. This should support gold and silver and indeed lead to gains on safe haven demand.
Sterling fell versus gold 1.2% yesterday – from £857 to £867.66 per ounce after the polls showed UK citizens favoured leaving the EU. That revived concerns the BREXIT referendum on June 23 will throw global markets into turmoil and severely undermine confidence in the already vulnerable, nascent EU super state.
The pound also dropped to a three-week low versus the dollar after the polls. While the pound pared its earlier declines, a gauge of anticipated swings against the dollar in the next month surged to the highest in at least seven years. One-month implied volatility in pound dollar trading rose above 22 percent, the highest since February 2009.
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