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Gold Price Drops Below $1,300 On Rumors Brexit Vote Could Be Postponed

Editor's Note: The article was updated to include comments from Kitco's Jim Wyckoff.

(Kitco News) -Gold futures are selling off Thursday afternoon, due to rumors that the Brexit Referendum vote could be postponed after the death of a popular politician.

The selloff started as news circulated that U.K. Member of Parliament, Jo Cox was killed after being shot at least twice following a meeting with her constituents.

According to some sources, Cox, who is a member of the Labour Party was a strong campaigner for the “remain” side for the June 23 referendum on whether or not the U.K should remain a member of the European Union.

Quoted by the Associated Press, Prime Minister David Cameron said "this is absolutely tragic and dreadful news."

"We have lost a great star," he said." She was a great campaigning MP with huge compassion and a big heart."

Campaigning for both sides of the referendum halted political activities for the day as a result of the tragic death.

“People are questioning whether or not the vote will happen next week and that is why gold is reacting,” said one Chicago Trader, who wished to remain anonymous.

Gold has fallen sharply after hitting a 22-month high at $1,318.90 an ounce at the start of the North American trading session. Since the news of Cox’s death, gold has fallen more than 1%, but is still holding on to some post-FOMC gains.

August Comex gold futures last traded at $1,296.40 an ounce, up 0.60% on the day.

Bill Baruch, senior commodity broker at iiTrader, said that the tragic news has sparked some profit taking; however, he added that the selloff is probably exaggerated because of over-exuberance in the marketplace ahead of next week’s referendum.

While investors were spooked as a result of the shooting, Jim Wyckoff, senior technical analyst at Kitco.com said that he hadn’t heard any rumors that the referendum would be postponed. He added that it is an unlikely scenario, “knowing the Brits gritty resolve.”

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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