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Gold Hits a 4-Week High over Fears of Brexit, Federal Reserve Meeting

June 13, 2016 at 19:10 by Andrew Moran

Despite a few hiccups, gold prices continue their strong 2016. The yellow metal reached its highest level since mid-May on Monday as investors fear Great Britain exiting the European Union and upcoming policy meetings held by several central banks, including the Federal Reserve.

August gold futures rose as high as 1%, Indoor Bounce House For Toddlers or $11.90, to $1,287.80 per ounce at 14:39 GMT. Spot gold prices inched 0.8%, or $9.91, higher to $1,284.76 an ounce at 16:40 GMT. These increases helped gold reach a four-week high.

Silver prices also continued their climb on Monday as silver rose 0.52%, or $0.08, to $17.40 an ounce.

After declining 7% in May, gold has rallied 6% since June 3. Over the past month, investors have been boosting their holdings of gold and are flocking to the yellow metal as a safe haven over several economic fears.

Earlier this month, the Bureau of Labor Statistics (BLS) released May’s weak employment numbers, which saw the US economy add just 38,000 jobs. This led many investors to begin betting against the US central bank raising interest rates for just the second time in nearly a decade. The Federal Open Market Committee (FOMC) will meet on Tuesday to discuss the national economy and interest rates. The odds of a rate hike this month are very slim, while the likelihood of a July rate hike continues to shrink, according to the CME Group FedWatch.

Moreover, on June 23, voters will decide whether Great Britain should leave the EU, otherwise known as a Brexit. Stock markets worldwide have experienced the jitters, anticipating what the referendum will result in.

Other central banks are scheduled to meet this week, including the Swiss National Bank (SNB), the Bank of Japan (BOJ), and the Bank of England (BOE). Policymakers are expected to talk about the potential impact of a Brexit.

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