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Gold Prices Simmer in Post-Brexit Rally, Hover 2-year High

June 27, 2016 at 17:28 by Andrew Moran

Gold and silver prices skyrocketed on Friday after nearly 53% of Britons voted to Leave the European Union (EU) in Thursday’s historical referendum. Gold spiked as high as $71, while silver rose more than 2% in the post-Brexit rally. As the Brexit fallout continues, how is the yellow metal performing on Monday? It is hovering near a two-year high.

August gold prices rose 0.13%, or $1.71, to $1,321.71 per ounce at 17:00 GMT. With Brexit still pummeling markets worldwide and investors seeking a safe haven, gold prices are closing in on their highest settlement level since July 11, 2014.

September silver prices, meanwhile, have pared some of their gains from last week. Silver declined 0.48%, or $0.09, to $17.70 an ounce.

The precious metals have had a strong first half of 2016. Year-to-date, gold is up 23.31%, or $249.50, per ounce. Silver is up 28.28%, or $3.91, per ounce.

Global investors are seeking safe haven assets as stock markets are being battered. On top of the market-rattling Brexit, the Federal Reserve is seemingly unlikely to raise interest rates next month. According to the CME Group FedWatch tool, there is a 6% probability of a July rate hike. The odds of a September rate hike stand at 22%.

Since the Brexit vote, more than $2 trillion have been wiped off stock markets. With significant losses in US and European equities and diminishing odds of a rate hike this summer, the demand for gold has greatly increased.

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