Gold Awaits Brexit Vote Along with Other Markets

The stereotypical car ride story with kids always circles around the hyper peanuts in the back seat saying something like, “When are we going to get there?”

The financial world is feeling the pain of the kids in the backseat as it applies to the vote in Britain concerning a possible exit from the European Union. Thank goodness we’re almost there.

Apparently European stock traders are convinced that Britain will stay. The DAX and FTSE were both up around 0.50% today with the French CAC higher by 0.30%.

Things were a little softer in the U.S. The Dow, S&P 500 and the NASDAQ struggled to say even but ultimately fell into the red. A data release concerning home resales might already be pushing investors and analysts into rethinking the July Fed meeting.

U.S. home resales in May rose to a nine-year-plus high as improving supply expanded choices for buyers. Analysts should read this as indicative of a solid American economy despite a sharp slowdown in employment growth last month.

Sales nationally were up 4.5% from a year ago.

Existing home sales surged 4.1% in the Northeast and climbed 4.6% in the South. Sales in the West, which has seen a strong increase in house prices amid tight inventories, jumped 5.4%. The Midwest slumped.

Additionally, West Texas Intermediate crude fell 1.45% and Brent North Sea just about followed suit. (Both are off their lows in late trading.) A smaller-than-predicted draw (by one measuring stick) helped to depress oil prices. The relative softness of the U.S. dollar handily helped keep the price of crude from dumping into the $45 range.

The price of gasoline and other key petroleum distillates was down across the board. The whole commodities complex was mixed to lower.

Gold gained some advantage via dollar weakness but could not cash in the chips. Regular trading overwhelmed the weak-dollar effect so gold is down about $2.00 in late-afternoon action.

The VIX ticked up over 6.00%, volatility rearing its head as we await the Brexit vote.

However, the CME’s rate-hike probability index (Fedwatch) saw traders betting that the likelihood of an interest rate rise was less than 10.00%.

Wishing you as always, good trading,