Gold trading outlook: futures remain supported as Brexit vote effects persist

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

On Friday gold for delivery in August traded within the range of $1,252.95-$1,362.45. Futures closed at $1,322.40, soaring 4.85% compared to Thursday’s close. It has been the 130th gain in the past 280 trading days and also the sharpest one since September 19th 2013. In weekly terms, the yellow metal added 2.13% to its value during the past week. It has been the 14th gain in the past 25 weeks and also a fourth successive one. The commodity has extended its advance to 9.44% so far during the current month, following a 5.77% slump registered in May.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were advancing 0.54% on Monday to trade at $1,329.50 per troy ounce. The precious metal went up as high as $1,339.30 during early Asian trade, while the current daily low was at $1,322.50 per troy ounce, recorded during the early phase of the Asian trading session as well.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was gaining 0.70% on the day at a level of 96.30, after reaching 96.52 earlier. On Friday the gauge rose to 96.70, or its highest level since March 16th. The index has advanced 0.43% so far in June, after surging 3.04% in May.

Demand for gold and other safe-haven assets increased sharply following the surprising outcome from the UK vote on EU membership. Almost $2.08 trillion were wiped off global stock markets on Friday, a figure more stunning than the 2008 Lehman Brothers bankruptcy and the Black Monday equity market crash in 1987. The effects from the Brexit vote were to be observed on Monday as well, as European shares reached 4-month lows, while the Sterling continued to lose ground against its major peers.

On Friday the British currency registered its sharpest rate of decline within a day on record, as it was losing more than 10% at one point during the Asian trading session. GBP/USD crumbled to as low as 1.3231, or a level unseen since late September 1985.

The UK Prime Minister, David Cameron, is expected to speak on Fridays vote in front of Parliament at 13:30 GMT today.

Meanwhile, silver futures for delivery in August were inching down 0.02% on the day to trade at $17.810 per troy ounce, after going down as low as $17.690 a troy ounce during the mid phase of the Asian trading session.