Gold will stand out in commodity markets this week as the fallout from the Brexit vote in Britain continues to rattle markets and investor confidence.
Comex gold futures soared and oil futures sank on Friday night, our time, in the wake of the Brexit vote in the UK. Gold becomes a favoured ’safe haven’ in times of economic, market or political uncertainty and Friday was no different.
Comex August gold futures in New York jumped $US59.30, or 4.7%, to settle at $US1,322.40 an ounce with prices marking the largest single-session dollar and percentage climb since September 2013.
The settlement was highest since July 11, 2014, according to US markets data group FactSet.
Gold futures traded as high as $US1,362.60. That was nearly $US100 an ounce above Thursday’s settlement, which marked a fifth-straight session decline. For the week, gold was up 2.1%, so the Brexit vote saved the metal from a massive loss.
The surge in gold prices will again see the prices of our leading gold stocks take a run higher today.
On Friday Newcrest Mining, the number one miner, jumped nearly 9%, Evolution Mining shares were up more than 12%, RegisResources and St Barbara shares were up 7.7% on the day.
Comex July silver rallied by 43.6 cents, or 2.5%, to $US 17.789 an ounce In New York, the highest settlement since late April. The metal rose 2.2% over the week.
And Comex July copper futures fell 5.2 cents, or 2.4%, to $US2.111 a pound, pressured by expectations of weaker demand for the industrial metal.
It was still up about 2.9% for the week, but will come under further pressure late this week when the two monthly reports on the health of Chinese manufacturing emerge.
Oil futures regained some confidence late in Friday’s session after a sharp sell-off earlier in the day.
But they still lost 5% on the day in the wake of the Brexit vote in the UK.
A day after a week long rally and rising optimism that the ‘remain’ side would win in the UK had helped push it back above $US50 a barrel, Brent crude futures shed 4.9% in London to close down at $US48.41.
In New York, West Texas Intermediate also ended the day down by a similar amount at $US47.64 a barrel.
Concerns over the potential financial impact of Brexit and its wider impact on global growth prompted investors to dump stocks and growth-dependent commodities such as oil.
Friday’s losses pushed oil back into the red for the week.
Now the uncertainty will see the US dollar strengthen and that will keep the oil rally in check in next couple of weeks or so.
