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Kitco June 28, 2016 01:01:52 AM

Gold Firmer On Safe-Haven Demand, But Profit-Taking Restricts Gains

Paul Ploumis
ScrapMonster Author
Gold prices ended the U.S. day session modestly higher and down from the session highs Monday.

Gold Firmer On Safe-Haven Demand, But Profit-Taking Restricts Gains

(Kitco News) - Gold prices ended the U.S. day session modestly higher and down from the session highs Monday. There was some more safe-haven demand featured in gold as world markets are still tense and volatile after the Brexit “leave” vote late last week. Gold prices last Friday hit a 27-month high. However, there was some profit-taking from the shorter-term futures traders Monday that took gold prices down from their daily highs. August Comex gold was last up $2.40 an ounce at $1,325.00. July Comex silver was last down $0.044 at $17.745 an ounce.

The key “outside markets” were in a bearish posture for the precious metals markets Monday, which also limited upside price action. The U.S. dollar index was sharply higher and crude oil prices were solidly lower.

The world marketplace is still feeling the hangover effects of last Thursday’s U.K. vote to leave the European Union. The short-term and long-term effects of the leave vote are being hotly debated, but one thing is certain and that’s uncertainty. Traders and investors hate uncertainty and that’s what’s boosting safe-haven assets like gold.

European stock markets were solidly lower overnight, with the U.S. Dow Jones Industrial average down over 200 points in U.S. afternoon trading. Asian stocks began to recover from the Brexit shock Monday as Chinese and Japanese stock markets posted overall gains. China’s central bank on Monday weakened its yuan currency against the U.S. dollar by the largest amount since last summer.

U.S. Treasury bond futures prices were up by over 3 full points, price-wise as safe-haven moves among traders and investors are in firmly in play. The British pound and Euro currency continued to get hammered Monday.  As long as the currency markets are roiled, sellers in safe-haven assets, including gold, will be scarce.

Courtesy: Kitco News

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