Gold Soars To 27-Mo. High On Safe-Haven Demand After Brexit “Leave” Vote
New York (Jun 24) World markets are in keen turmoil and seeing stresses, and gold prices have soared to a 27-month high of $1,362.60, basis August Comex futures, in the wake of a shocking U.K. vote to leave the European Union. The U.K. prime minister has resigned following the “leave” vote—which London odds-makers saw only a 20% chance of occurring. There is keen speculation that this is the beginning of the end of the European Union in its present form. Silver prices are also sharply higher and hit a 1.5-year high overnight, following the lead of safe-haven gold. Look for gold prices to continue to appreciate amid the extreme anxiety that is presently gripping the world marketplace. August Comex gold was last up $60.50 an ounce at $1,323.60. July Comex silver was last up $0.622 at $17.975 an ounce.
World stock markets plunged overnight, with the U.S. Dow Jones Industrial average set to open over 500 points lower when the U.S. day session begins. U.S. Treasury bond futures prices are up a whopping 5 full points, price-wise, to set a new contract high. The yield on the U.S. 10-yeaer note dropped to a record low of 1.42% overnight. The U.S. dollar index is sharply higher as safe-haven moves among traders and investors are in full force Friday morning. Meantime, the British pound and the Euro currency are getting hammered, along with European stock markets.
Crude oil prices are sharply lower, with most raw commodity markets also seeing selling pressure.
European and Asian central bank officials are pleading for calm and have said they stand ready to provide extra liquidity to the financial markets, so they don’t seize up.
U.S. economic data due for release Friday includes the advance durable goods orders report and the University of Michigan consumer sentiment survey.
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, August gold futures bulls have the solid overall near-term technical advantage and now have momentum on their side. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,400.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the overnight low of $1,252.80. First resistance is seen at $1,340.00 and then at $1,350.00. First support is seen at $1,318.90 and then at 1,300.00. Wyckoff’s Market Rating: 8.5
July silver bulls have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the overnight low of $17.105. First resistance is at the overnight high of $18.37 and then at $18.50. Next support is seen at $17.50 and then at $17.25. Wyckoff's Market Rating: 8.0