With the Fed decision not to increase interest rates at its latest meeting, in part because of uncertainties over the possible effects of a UK Brexit vote on the global economy, and UK polling seeing Brexit as a more than distinct possibility, gold surged thought the $1,300 level Wednesday and Thursday morning. At one point it reached $1,315 – its highest level for almost 2 years.
And silver also has begun to move again too – some would say not before time. It reached over $17.70 and while it has already exceeded that level earlier this year it tends to be much more volatile in its price movements than gold, and a continuing gold price increase could well see silver shoot up as the Gold: Silver ratio tends to come down when gold rises.
It is currently at 74.2 (still a historically high level) and a fall below 70 and a gold price at $1,310 would see silver around a dollar higher which would certainly give some heart to the long suffering silver investor.
However both gold and silver then came down with a bang, supposedly due to rumours of a postponement of the UK referendum to decide whether or not to leave the European Union following the shooting and tragic death of a very well liked (on both sides of the political spectrum) female Member of Parliament, Jo Cox.
To us here in the UK the idea of a referendum postponement over such an issue is hugely unlikely. The rumour probably came about because as a mark of respect referendum campaigning was suspended for the rest of the day. See: Rumours on Brexit referendum postponement misguided
But regardless, the big money which appears to have been trying to cap rises in the gold price took this as a major opportunity to bring down the price, with gold falling at one stage to below $1,280 and silver back to the $17.20s.
For the rest of this column, click here: https://lawrieongold.com/2016/06/17/update-brexit-in-the-balance-gold-surges-silver-may-begin-to-fly/