Kitco News - Gold showed its safe haven appeal and is still holding gains that are $50 higher on the day. The metal has backed down from the session high of $1,362.60, basis August Comex futures, scored in overnight trading as the U.K. voted to exit the European Union. August gold was last up $53.60 an ounce at $1,316.00. 'Gold soared over $100 on the news. In my 43 years in the business, I have never witnessed a market like last night. As a colleague stated, the British pound posted its highest and lowest level in six months, on the same day. The yen moved in a seven percent range. Global equity markets dropped as much as 10 percent. Gold spreads on the wholesale level stretched to $10,' says Peter Hug, global trading director for Kitco Metals. He adds, 'Taken independently, many of these events have happened, but never all together within an eight- hour trading window.' The question is now, what happens next for gold? 'I honestly do not know. I was asked what would happen if the Brits decided to leave. I suggested that this was not priced in and a move to $1,300 was a given, with a possible bump as high as $1,325. From there, I suggested the market would consolidate and begin to try and figure out what the ramifications would be." Hug explains, 'I also suggested that the dollar and gold would move together as safe- haven demand played out. This is where we are now. Technicals mean little here. some will see this as an opportunity to take profits. Some will see this as the first steps in the disintegration of the EU and become committed buyers. Let the market settle.'
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.