Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The week opened on a high note for gold, around $1,285 per ounce, about $15 higher than its close last Friday. The upcoming Brexit vote on June 23rd supported the price of gold this week, as discussions continued toward the vote. The Brexit conversation tied into the anticipation of the Federal Reserve’s idea to raise interest rates, and the disappointing jobs report recently released. As financial instability in world markets and governments crescendo, gold becomes more appealing as a store of wealth alternate to paper currencies. Experts believe a vote to remove Britain from the European Union could shoot gold prices up by 10%.
On Tuesday Barrick Gold reported the highest profit margin in the last nine quarters, higher than expectations. The gold price hovered around a six-week high. The momentum for gold that began at the beginning of the year picked up again this week.
The price of gold reached the significant turning point of $1,300 per ounce Wednesday, to a high last seen in May, after the Fed announced interest rates would remain unchanged. At its June meeting, the Fed also revealed it would be less aggressive on tightening monetary policy in 2017, considering economic conditions. Two interest rate increases are still planned for 2016, based on expectations that the job market will pick up again after a slowdown. The dollar experienced losses against a rise in currencies.
Gold’s strength surged to $1,313 per ounce on Thursday, rising against the dollar at a 21-month low, weak bonds, and equity volatility, in addition to Brexit fears. Trading volumes were double the average, and even though some sell offs caused the gold price to retreat from that level, the yellow metal remains 23% higher year-to-date at more than $250 gains. Gold prices were the highest since August 2014. Oil prices also broke out of a slump to a four-month high. The yen reached a three-year high after the Bank of Japan refrained from more economic stimulus.
Friday’s gold price retreated against a recovery in world markets and a suspension of the Brexit campaign after a pro-Remain politician, MP Jo Cox, was murdered. Gold closed out the week with a 1.25% gain.