The dollar reversed its gains
As the British pound fell to its lowest level in about 31 years in the past two trading days, the US dollar rose comparatively. The euro fell by 1.9% on June 24, 2016, while the pound plunged by as much as 6.6%. The pound was more vulnerable than the euro due to Brexit. Due to the falls in these two currencies, the US dollar rose by close to 0.54%.
The US Dollar Index (or DXY) measures the dollar’s strength against a trade-weighted basket of six major currencies: the euro, the Japanese yen, the pound, the Canadian dollar, the Swedish krona, and the Swiss franc. The index fell by ~0.44% on June 27, reversing a significant chunk of its gains from June 24.
The fall in the US dollar is usually positive for precious metals, as they are priced in US dollars. A higher dollar makes greenback assets more expensive, while a cheaper dollar boosts demand, as investors in other countries have to shell out a fewer dollars to buy these assets.
On June 24, the US dollar and gold both surged on safe-haven bids. While the dollar reversed most of its gains, gold maintained marginal gains.
The rise in the US dollar is also beneficial for mining companies, as they sell their core products—precious metals—in dollars. Mining shares that saw the highest returns on June 27 included AngloGold Ashanti (AU), RandGold Resources (GOLD), and Eldorado Gold (EGO). These three companies rose by 4.1%, 5.7%, and 1.6%, respectively, on the day. Together, they contribute 13.4% to the changes in the VanEck Vectors Gold Miners ETF (GDX).