GLOBAL EQUITY, CURRENCY RECOVERY ENDS GOLD SURGE

Gold futures edged lower Tuesday in the US due to a return in investor optimism, although ongoing market uncertainty capped the losses. Gold for August delivery on the Comex division of the New York Mercantile Exchange was last down $7.10 or 0.5 percent at $1,317.60 per ounce. Trade has ranged from $1,308.20 to $1,329.50.

The yellow metal has benefitted from a massive flight-to-safety following the UK Brexit referendum but today investors locked-in profits.

“With Brexit now a reality the market seems to be calming down from its recent turmoil,” George Gero of RBC Wealth Managament said. “The FTSE and sterling are higher giving indications the panic has receded. This does not mean things will get better but it does mean what will happen will do so in a slower fashion.”

European equity markets recovered today with the FTSE 100 and Stoxx Europe 600 each rising 2.6 percent. Notably, the pound bounced-back after trading at the lowest level in over three decades.

In US markets, the Dow Jones industrial average and S&P increased 0.9 percent and 1.1 percent respectively, while the dollar softened 0.2 percent to $1.1049 against the euro. Overnight, holdings in the exchange-traded funds tracked by FastMarkets surged 14.32 tonnes to 1,996 tonnes, the highest since July 22, 2013. Investors have been attracted due to gold’s safe-haven characteristics to protect their portfolios against volatile market conditions.

Yesterday, European Central Bank president Mario Draghi did not mention the UK’s decision to exit the single market but called for greater policy coordination between world’s economies to combat slow growth and persistently weak inflation

The Brexit vote triggered a major capital exit from the economic bloc, with European banking stocks falling nearly 25 percent at one point – the biggest downturn since the 2012 sovereign debt crisis.

 In data, US final GDP quarter-over-quarter in the first quarter came in at 1.1 percent gain, a touch above the 1.0 percent forecast. Final GDP price index over the same period edged up 0.4 percent, missing expectations of a 0.6 percent gain.

The S&P/CS composite-20 HPI for April increased 5.4 percent, a touch below the 5.5 percent economic consensus.Lastly, CB consumer confidence for June bested expectations at 98, while Richmond manufacturing index in June stood at -7, missing the estimate of 2.

As for other precious metals, Comex silver for July settlement ticked up 9.1 cents or 0.5 percent to $17.835 per ounce. Trade has ranged from $17.550 to $17.880.Platinum for July delivery declined 40 cents or 0.1 percent to $978.80 per ounce while the most-actively traded palladium contract stood at $570.05 per ounce, up $12.65 or 2.3 percent.

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