The UK decision to exit the EU has proven to be a downer for most markets. When it comes to gold and silver and other precious metals, however, the referendum results have been a boost.
The prices of both gold and silver have been soaring as they continue to provide a safe haven for investors who are baffled by the direction the equity markets will take in both the short and long term. Comments from the U.S. Federal Reserve Chair Janet Yellen about the possibility of not raising interest rates as well as increased retail demand in the U.S. provided additional support for the need to tuck away funds in safe haven investments.
Non-farm payrolls due out on July 8 should offer clues to the state of the economy and a strong jobs report and favorable revisions for the June nonfarm payrolls data, however, could give the dollar a boost and undermine gold and silver, at least temporarily.
Silver hits $19.00 +
Silver broke through its critical resistance on Friday reaching just under $20. Analysts say that the move in silver prices is most likely due to influx of massive flows from funds on the first day of Q3 after seeing, often too late, how silver prices soared 40% during the first 6 months of 2016. These analysts expect money to continue to flow into the precious metals sector during the coming week as traders return from the 4th of July holiday. One analyst even predicted it would hit as high as $50!
Silver advanced for the eighth time in nine sessions and for September delivery it rallied 96.5 cents, or 5.2%, to close at $19.588 an ounce. The settlement is the highest in two years when the precious metal ended at $19.61 an ounce. Silver prices jumped 10.1% this week, driving up their year-to-date gain to 41.9%.
Gold for August delivery on Friday tacked on $18.40, or 1.4%, to settle at $1,339 an ounce on the Comex division of the New York Mercantile Exchange. Gold’s close marks the highest price since July 10, 2014 when the yellow metal ended at $1,339.20 an ounce. Prices advanced 1.3% this week, after rising 6.9% in the second quarter, and they are 26.3% higher on the year to date.
According to one economist at Societe Generale ,"Looking ahead, it seems that gold will remain one of the major beneficiaries in the current backdrop, as heightened volatility and lingering uncertainty will keep investors' risk appetite in check."
Platinum marked its highest level since May 18 rising as high as $1,055 an ounce and was on track for its best weekly rise since October last year. Palladium, heading for its best week since early March, rose to its highest since May 13 at $605.40, and was up 1.2 percent at $602.05.