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Gold Surges To Highest Levels In Weeks

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Gold Surges To Highest Levels In Weeks

Rising levels of uncertainty in the markets have pushed investors to pile their money into gold.

This increase has led to gold rising to its highest levels for five consecutive weeks.  

Gold is soaring high

The price of gold has risen for five consecutive weeks, reaching a record high of $1,289.85 on June 13th, an increase of 0.18%.

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This increase is the largest gold has seen since last May, when gold managed to reach $1,292.85.

The lowest level was $1,050.72 at the end of 2015.

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Gold is doing very well in comparison to other metals, which are currently struggling.

The price of silver is currently $17.36 with a change of -0.04, while the price of Platinum is $986, and Palladium $538.

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What has caused gold prices to rise?

The upcoming UK Brexit referendum has created lots of uncertainty in the markets.

European stocks have dropped to a three-month low; the Stoxx Europe 600 fell 1.1% to 326.80.

As well as the UK referendum, the strength of the Japanese Yen has also worried investors.

The Yen is currently at a three-year high against the dollar, which has turned it into a safe bet for investors looking to protect their money.

The rest of the Asian markets are in crisis, and the US market is in recovery at a slower pace than predicted.

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The full state of the global market

In the Americas market, Dow Jones is currently trading at 17,632.16 with a change of -100.32.

S&P 500 is currently trading at 2,066.11 and NASDAQ 4,822.25.

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In the Europe, Middle East, and African markets, Euro Stoxx 50 is currently trading at 2,795.97 with a change of -57.55.

FTSE100 is currently trading at 5,923.20 and DAX 9,512.71.

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In the Asia Pacific market, Nikkei is currently trading at 15,859 with a change of -160.18.

TOPIX is currently trading at 1,271.93 and HANG SENG 20,387.53.

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What has been the response?

Global economic warnings have been issued by the following:

  • The World Bank
  • U.S. Federal Reserve’s former Chairman Alan Greenspan
  • International Monetary Fund
  • Bank of England’s former governor Mervyn King

There will also be a meeting between the Bank of Japan and the Federal Open Market Committee.

The market is preparing for the possible financial disruption that Brexit could cause.

What would Brexit mean?

Opinion polls held in Britain show an even split over leaving the EU.

Reasons to leave the EU to include:

  • Stifling rules of EU membership
  • Economic boost
  • Regain control over immigration

Reasons to remain in the EU include:

  • Trade would suffer without the EU
  • Risk of recession
  • Risk of greater job losses
  • The pound would collapse
  • House prices would fall

David Cameron, the currently British Prime Minister, would be pushed to quit if Brexit happened.

It is possible that Boris Johnson, former London Mayor, could succeed him

Cameron is currently campaigning to leave, and Johnson is now touring for Brexit.

What would a Brexit mean for the economy?

The possible economic repercussions of leaving the EU have mostly been negative.

US President Barrack Obama and many other world leaders have all expressed concern along with The UK Government and the Bank of England.

The majority of the concern regarding the economy has centered on trade.

Britain currently has the right to free trade with other EU countries.

Currently, 45% of Britain’s trade is with the EU and other services, such as Banking makes use of the EU agreement.

If Britain were to leave the EU, then they would lose the right to free trade.

The only way Britain could currently negotiate free trade with the EU should Brexit happen would be to pay or accept free movement, two options now rejected by Brexit.

Brexit effect globally

Many US companies invest in Britain; US companies see Britain as a path into the EU.

A recent survey revealed that 72% of global businesses consider access into Europe has a key factor when investing their money.

Brexit could also mark the end of the EU as there is severe unrest in the EU.

Other EU countries have been considering their position in the EU.

If Britain successfully manages to leave the EU, then EU leaders are concerned that other nations will follow.

If enough states move, then the EU could fall apart; this would have an effect on the global stability, security, and the economy.

Conclusion

The price of gold is currently at a five-week high; although this may appear to be positive, the reasons behind the rise in gold make the boost in gold a negative.

There is increasing unease and uncertainty surrounding the global markets.

Currently, all the world markets are suffering loses, except Japan, who is surprising investors as the Yen soars.

Investors are now placing their money in gold and or the Yen.

There are many factors, which have been at the center of the global economic crisis, but a major factor has been the upcoming Brexit referendum.

Investors and economist are predicting that if the UK were to exit the EU, then the knock on effect would affect the world as a whole.

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