Gold is under pressure for the 2nd straight day to begin the new week ahead of Thursday’s UK referendum…the yellow metal has traded between $1,265 and $1,287 so far today…as of 9:30 am Pacific, bullion is off $21 an ounce at $1,269…Silver has retreated 25 cents to $17.22…Copper has added a penny to $2.10…Crude Oil has fallen $1.00 a barrel to $48.37 on reports from Nigeria media that the government has signed a 30-day ceasefire with “militants” (terrorists), while the U.S. Dollar Index has gained half a point to 94.03…
Despite Gold’s drop yesterday, holdings in SPDR Gold Trust rose 0.10% to 908.77 tonnes…
How reliable are the polls in the UK?…2 opinion polls yesterday suggested support for Britain staying in the European Union had recovered some ground following the murder of a pro-EU lawmaker, but a 3rd poll found support for a “Brexit” ahead by a whisker…the market seems to be betting that the Remain campaign will prevail Thursday, but over the last few years we’ve had plenty of examples around the globe where opinion polls have been wildly off and markets got surprised…polls also showed that last year’s election in Britain was a tightly contested battle right to the final hour, but David Cameron’s Conservatives actually thumped the Labor Party…the only poll that counts is the one on Thursday from all the votes cast in the referendum…Gold has many fundamental factors in its favor at the moment but for now traders are focused only on what they can see immediately in front of them, and that’s the UK referendum…more volatility in bullion can be expected through the rest of the week and this could open some interesting trading opportunities…
The Remain side’s scare tactics are unbelievable – they’re even targeting grandma and grandpa…billionaire investor Wilbur Ross (the bulk of WL Ross & Co.’s business in the UK is in mortgage lending) said this morning on CNBC’s “Squawk Box”, “The average house in the UK is about 250,000 pounds, and if it went down around 10%, which I think could very well happen, that would wipe out about half the net worth of most of the older people who own their homes.” According to Ross, a large majority of Britons over age 60 own their homes, and polls show that older people are skewing to vote Leave in Thursday’s referendum…
Meanwhile, George Soros, another billionaire investor, is warning of a potential Black Friday if Brits vote to leave the UK: “I want people to know what the consequences of leaving the EU would be before they cast their votes, rather than after,” Soros wrote in an op-ed published in the Guardian newspaper. “A vote to leave could see the week end with a Black Friday, and serious consequences for ordinary people.”
Some wise words from TD Securities: “Once the market takes stock after the referendum, markets will be still be left looking at a world in which significantly higher than zero yielding quality sovereign and even corporate bonds continue to be in very short supply. This along with a dovish outlook from the FOMC, with possibly only one hike this year, should continue to be a catalyst for strong Gold markets. It is not a given that we will see a significant Gold correction, even if the U.K. voters decide to stay in the EU.”
Yellen Appears Before Congress: How Many Times Will She Say The Word “Uncertain”?
Fed chair Janet Yellen’s next communications test comes today and tomorrow during her semi-annual testimony to U.S. lawmakers, less than a week after the central bank kept interest rates unchanged near record lows and lowered its projections for hikes in 2017 and 2018…
Fed policymakers’ deepening uncertainty about their own projections has resulted in the central bank sending mixed messages – repeatedly ratcheting up rate hike expectations only to tone them down later…this has clearly damaged the Fed’s credibility…at last Wednesday’s quarterly news conference, Fed officials’ doubts were in plain view with Yellen using the term “uncertain” or its variations 13 times, more than twice as often as in March!…in December, when the Fed raised its rates by a quarter point for the 1st time in nearly a decade, that word only came up twice…
Right now the Fed is only certain of 1 thing – its uncertainty…
In today’s Morning Musings…
1. Coral Gold (CLH, TSX-V) sells Robertson Gold Property in Nevada to Barrick for $20 million CDN…
2. Bargain-hunting time in a quality Silver play…
3. Junior benefits from an asset bankruptcy sale…
4. CRB Index gives clues as to 2nd half of 2016 for commodities and the Venture…
Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, or login with your username and password to view the rest of today’s Morning Musings…
SAVE 25% with a risk-free subscription (as little as $1 per day) as you gain full access to this and other exclusive BMR content…
