6.28.2016. In a move that sent shockwaves through every financial market, the UK voted to exit the European Union on Friday of last week. Gold immediately skyrocketed from the low $1,250s all the way up to over $1,360 with the price jumping all over the place for a large chunk of Friday’s early trading session. The fallout from the referendum has been substantial. Equities, especially financial institutions, have been hammered, UK credit was downgraded by a variety of credit agencies, UK 10 year yields declined below 1% for the first time on record, and the GBP has lost over 10%. This is just the immediate reaction to the referendum. Many economists posit that this move by the United Kingdom could just be a “canary in the coalmine” of further global economic distress. Investor anxiety in other financial markets has already translated into gains for gold and this should continue to be true in the near term. Dips down to $1,300 will likely find sizable bids while overhead resistance is coming in at $1,360.
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