Gold was ending the U.S. day session near steady Tuesday, in a choppy trading affair that saw prices visit both sides of unchanged. There was some safe haven demand amid growing concerns about the U.K. “Brexit” vote next week, and ahead of the FOMC meeting. However, bearish outside markets today—a firmer U.S. dollar index and lower crude oil prices—prompted some selling in the precious metals markets. August Comex gold was last down $1.20 at $1,285.70. July Comex silver was last down $0.073 at $17.38 an ounce.
Gold hit its highest in almost six weeks on Tuesday, rising on worries about a potential British exit from the European Union and expectations the U.S. Federal Reserve will not raise interest rates at its June meeting. Spot gold rose as high as $US1,289.80 an ounce earlier and was up 0.1 per cent at $US1,285.06 an ounce by 2:51 p.m. EDT (0451 AEST).
Market watchers are looking forward to the end result of this week’s meeting of the Federal Reserve’s Open Market Committee (FOMC), which began Tuesday morning and ends Wednesday afternoon. There is not a real clear consensus on whether the Fed will raise interest rates at this meeting. However, the recent very weak U.S. jobs report for May has most market watchers speculating the Fed will not make a rate hike in June. The Bank of Japan and the European Central Bank also have monetary policy meetings later this week.
The FOMC meeting this week is arguably being trumped by concerns about next week’s U.K. vote on whether that country stays in the European Union. Recent U.K. polls show the vote could go either way, which is creating uncertainty and anxiety in the marketplace. The survivability of the European Union in its present form could depend on a “no” Brexit vote next week.
Technically, August gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,308.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,236.90. First resistance is seen at Monday’s high of $1,290.30 and then at $1,300.00. First support is seen at Tuesday’s low of $1,278.60 and then at Monday’s low of 1,275.20. Wyckoff’s Market Rating: 7.5
Several analysts, brokers and banks have already said that a Brexit – and the uncertainty it would cause – would likely lead to higher gold prices.
Today another heavyweight – this time in the form of Dutch bank ABN Amro – threw its weight behind that school of thought.
“In the days and weeks following the Brexit result, gold prices could rally to US$1350 per ounce,” she added.
Reference: Kitco, Proactive Investors, Business News
Thai
Eng