Will we see a Brexit or not?
Gold continued to hover near its lowest level in the past few weeks on Wednesday, June 22. On Wednesday, Asian stocks rose amid indications that the United Kingdom will vote to remain in the European Union. Gold futures for August expiration fell 0.2% to settle at $1,270 an ounce after touching $1,263.8 on Wednesday, June 22, their weakest level since June 10.
Silver futures for September expiration also closed a marginal 0.04% lower at $17.37 an ounce. Platinum and palladium, however, rose marginally by 0.2% and 0.64% on the same day.
We’ll have a verdict about the Brexit on June 23. As the United Kingdom is one of the major economies of the world, a Brexit could tip Europe back into recession, putting more pressure on the global economy. A global economy under pressure can positively affect the safe-haven appeal of precious metals. Thus, gold could soar if the Brexit takes place. However, most investors have assumed that the Brexit won’t happen, and thus gold is plummeting.
Performance of ETFs and miners
Alongside the fall in gold, funds like the Sprott Gold Miners (SGDM) and the iShares MSCI Global Gold Min (RING) also fell. These two funds dropped 2.4% and 3.3%, respectively, on a five-day trailing basis. These two funds, however, maintained gains on Wednesday.
Most miners saw an up day despite the losses in gold and silver. The mining shares that rose the most include Harmony Gold (HMY), Eldorado Gold (EGO), and Yamana Gold (AUY). These three stocks rose 8.8%, 4.6%, and 4.7%, respectively. Combined, these stocks make up about 10% of the fluctuations in the VanEck Vectors Gold Miners ETF (GDX). The ETF rose 2.3% on Wednesday.