Gold climbs as Brexit dims prospect for US Fed rate increase

Published Wed, Jun 29, 2016 · 02:14 AM

    [SINGAPORE] Gold advanced as the likelihood of an interest rate increase in the US diminished following Britain's vote to quit the European Union.

    Bullion for immediate delivery rose as much as 0.6 per cent to US$1,319.12 an ounce and traded at US$1,318.24 at 9:23 am in Singapore, according to Bloomberg generic pricing.

    The metal retreated one per cent on Tuesday after a 5.4 per cent surge following the Brexit result on Friday, which was its biggest two-day jump since January 2009.

    Gold is trading near its highest level in more than two years as investors abandon risk assets and turn to havens amid concerns that Brexit could disrupt the world's economic recovery.

    Federal Reserve governor Jerome Powell said Tuesday that global risks have shifted further to the downside after the referendum, introducing new uncertainties that may merit reassessing monetary policy.

    Traders are now pricing in a greater probability that the Federal Reserve will cut rates in upcoming meetings rather than raise them. They don't assign more than a 50 per cent chance of an increase until the beginning of 2018. A gauge of the US dollar held its decline.

    BLOOMBERG

    For more coverage of the EU referendum, visit bt.sg/BrexiT