MW: Gold hovers at 2-week low ahead of Brexit vote
Gold futures traded lower for a fourth session Wednesday and was headed to its lowest level in two weeks ahead of a highly anticipated referendum on the U.K.’s membership in the European Union.
A U.K. referendum, dubbed Brexit, will decide whether Britain exits the EU. And while polls have been mixed, the latest tone tips toward the U.K. remaining a member of Europe’s trade bloc. That perceived stability has dulled demand for “haven” gold that in recent weeks had approached $1,300 an ounce before retreating.
Read: How Brexit vote will shape the price of gold
Early Wednesday, gold for August delivery GCQ6, -0.18% slipped $2, or 0.1%, to $1,270 an ounce. Gold closed at $1,272.50 on Tuesday, the lowest settlement since June 8. The SPDR Gold Trust ETF GLD, -1.92% was up 0.2% Wednesday in premarket trade.
Meanwhile, July silver SIN6, -0.23% was little-changed, but tilting slightly higher at $17.33 an ounce. The iShares Silver Trust SLV, -1.62% traded 0.3% up in premarket trade.
Gold fell even as a broad measure of the dollar dipped in the red. The ICE U.S. Dollar Index DXY, -0.35% was down 0.2%. The dollar also traded lower against its Japanese counterpart. U.S. stock futures churned in narrow ranges.
Gold had climbed for much of early June because shaky economic data prompted the Federal Reserve to pare back its projected course for interest-rate hikes. Fed Chairwoman Janet Yellen offered little in congressional testimony on Tuesday to shift expectations for a gold-supportive go-slow approach to rate raises. Higher rates tend to undercut the appeal for gold while also typically boosting the dollar and dulling overseas appetite for precious metals that are priced in dollars.
For most traders, their assessment separates near-term trading conditions from a longer-term view on gold.
“The long-term outlook for gold could hardly be better. However, the short to medium-term outlook deteriorated substantially last week…with an important chart reversal on Thursday that was not negated by Friday’s bounce back,” said Peter Thomas, senior vice president in precious metals at Zaner, in a commentary.
