Gold has become a big winner on Friday Brexit consultation, as financial markets fell sharply after the surprising news that Britain had voted to leave the European Union. Gold took advantage of the chaos emerged a remarkable 7.1 percent on Friday. The metal has given some ground this week as market sentiment has improved as the dust begins to settle from the shock of Brexit. Gold fell on Tuesday, as the US GDP was revised upwards and a key consumer report exceeded expectations. Final GDP for the first quarter recorded a gain of 1.1%, above the estimate of 1.0%. This reading was stronger than the preliminary reading of 0.8% of GDP. Despite the upward revision was good news, the revised GDP report marked the weakest gain in a year. On the consumer front, Consumer Confidence impressed by climbing to 98.0 points, easily beating the forecast of 93.2 points. It is strengthening consumer confidence in the United States? It is not clear, as UoM Consumer Sentiment last week fell to 93.4 points and reached expectations. Consumer confidence is closely linked to consumer spending, and we will take a look at Personal Spending on Wednesday.
In the aftermath of the Brexit vote continues to reverberate in the UK and Europe, political leaders must now pick up the pieces and deal with the new radical scenario that was unthinkable a few months ago only - that of a European Union without Britain. The historic decision raises many questions and has led to political and economic instability in Europe and the UK, and finished with a staggering $ 3 trillion from global stock markets. The pound has fallen 11 percent since the vote, and the Australian dollar took a hit as well, as investors dumped risky assets in favor of safer like gold and the Japanese yen assets. Finance Minister George Osborne and Bank of England Governor Mark Charney have tried to reassure the markets and the public that the situation is under control, but what is? The political situation is fluid, with Prime Minister Cameron resign, the Labour Party in turmoil, and the general elections likely later this year. In the financial sphere, the pound and the markets have taken a beating, and London's position as a global financial center has been shaken. The uncertainty will not disappear in the short term, so traders should be prepared for greater volatility in currency markets.
The British Prime Minister Cameron meets with his EU counterparts in Brussels for a summit of two days, and there are already signs that this divorce between Britain and the EU could be spiteful and messy. Cameron said Monday that his successor would be the one to initiate the exit mechanism, and other British politicians have said that there is no hurry to leave. However, European legislators, furious with the decision, have asked Britain to leave as soon as possible. Britain could have voted "Stop", but it is clear that the time and type of exit plan remain unclear. The future framework of political and economic relations between the UK and the continent will have to be negotiated, and we will see a lot of uncertainty and perhaps fireworks in the coming months.
/ USD XAU Basics
Tuesday (June 28)
8:30 US Final GDP. 1.0% estimate. Real 1.1%
8:30 US Index Final GDP price. 0.6% estimate. Current 0.4%
9:00 S & P / CS Composite-20 HPI. 5.5% estimate. 5.4%
CB Consumer Confidence 10:00. 93.2 estimate. 98.0 reais
Richmond Manufacturing Index 10:00 US. Estimate 2 points. -7 Real points
19:00 US FOMC member Jerome Powell Speaks
* Key Announcements are highlighted in bold
* All times are EDT release
XAU / USD for Tuesday June 28, 2016
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