In Commodity News 22/06/2016
Gold fell for a third day on speculation that Britain will probably vote to stay in the European Union in a referendum on Thursday, undercutting demand for haven assets.
Bullion for immediate delivery dropped as much as 0.5 percent to $1,261.27 an ounce, the lowest price since June 9, and traded at $1,263.29 at 2 p.m. in Singapore, according to Bloomberg generic pricing. A third day of losses would be the worst run since May.
Gold has retreated this week as bookmakers suggest the “Remain” camp is in a strong position even as different polls have put each side ahead. That’s pared the metal’s advance this year, which has been driven by the U.S. Federal Reserve holding fire on rate rises. Fed Chair Janet Yellen on Tuesday laid out a cautious view of the economy in testimony before lawmakers.
“The result looks too close to call but we think the ‘Remain’ vote will take the day,” said David Lennox, a resources analyst at Fat Prophets in Sydney. “Gold will likely drop back toward $1,200 on a rally in the pound, a softening in the U.S. dollar and the removal of the Brexit safe haven premium.”
An index of odds compiled by Oddschecker puts the probability of a vote to remain at 79 percent, up from from 63 percent on June 14. In the U.S., Yellen sought to avoid taking sides or being overly alarmist about the probable global fallout should Britain exit the EU, even as she reiterated that such an event could have “significant economic repercussions.”
While prices have dropped in the run-up to the vote, investors have still added to holdings in exchange-traded funds backed by gold. As of Tuesday, bullion assets rose for the 16th consecutive day to 1,905.07 metric tons, the highest since October 2013.
- Bullion of 99.99 percent purity lost 1.4 percent at $40.66 a gram ($1,152,69 an ounce) on the Shanghai Gold Exchange.
- Spot silver, platinum and palladium all fell.
Source: Bloomberg
