Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold rallied 0.7% to finish above $1,325, its highest close in nearly two years, as global investors continued to seek protection from the uncertainty surrounding Britain's exit from the EU. Silver fared even better, jumping 2.9% to close above $18 for the first time in 21 months.

At the same time, bargain-hunters poured into stocks for a second day in the wake of a Brexit sell-off that wiped $3 trillion from global equity markets in two days. Rising 1.8% today, the S&P 500 has recovered half of its Brexit losses. The Dow gained 1.6% and the Global Dow around 2.6%.

Adding to risk sentiment, U.S. consumer spending picked up 0.4% in May, supporting higher growth projections for the second quarter. The Atlanta Fed sees GDP rising 2.7% in Q2, up a tenth of a point from its last forecast.

But Brexit fallout is casting a pall over confidence that the recovery will continue apace. Fed Governor Jerome Powell warned today that "the risks to the global outlook were somewhat elevated even prior to the referendum, and the vote has introduced new uncertainties.� He suggested that the Fed is could keep interest rates low for longer, although he did not discuss specifics about timing.

The dollar fell 0.3%, in part because of diminished likelihood that the Fed will raise interest rates anytime soon. CME Fedwatch now sees merely a 20.1% chance of hike before March 2017. Lower rates pressure the dollar by discouraging forex investment searching for higher yield. A weak dollar supports gold and other commodities by making them less expensive to foreign buyers.

Despite the partial recovery in stocks, Brexit is creating an unprecedented demand for negative-yielding government debt. Fitch Ratings reported that safe-haven inflows have pushed the amount held in these bonds to $11.7 trillion, up from just $1.3 trillion a month ago, most of which are issued by Germany, France, and Japan.

The other two precious metals also finished higher, with platinum and palladium gaining 3.3% and 2.8%, respectively.

At the Comex close: August gold gained $8.60 to $1,326.50; September silver jumped 53 cents to $18.42; October platinum rose $32 to $1,012.60; and September palladium added $16.05, to $585.90 an ounce.