Britain’s Prime Minister Theresa May Wins Leadership Vote
When the votes were tallied, Theresa May received 200 of the possible 370 allowing her to win the vote of confidence-no-confidence held by the conservative party today. This confidence vote will allow her to continue her work in creating and implementing an exit strategy for Britain to leave the European Union, commonly referred to as Brexit.
The delay of the no-confidence vote had put tremendous pressure on the British pound as well as the euro dollar as it trades against the US dollar. It is been recent dollar strength that has put tremendous bearish pressure on gold prices on Monday and Tuesday of this week.
Prior to the vote being counted the dollar was already under pressure, and as of 5:25 PM Eastern standard time is currently down almost to 3/10 of a percent, and fixed at 97.085.
Gold prices along with the entire precious metals complex gained value on the day as a direct result of dollar weakness. Spot gold is currently fixed at $1245 per ounce.
On closer inspection it was all dollar weakness which defined today’s price move. Market participants sold the precious yellow metal today resulting in a decline of $2.75 per ounce. However, after factoring in dollar weakness which added $4.85 per ounce, gold gained $2.10 on the day.
Dollar weakness occurred prior to today’s vote in the United Kingdom in response to release of the consumer price index which was unchanged last month, and in line with analysts’ forecasts. This economic data clearly put pressure on the dollar which had seen moderate gains on Monday and Tuesday.
Gold futures are currently trading at $1250.60, after factoring in today’s net gain of $3.40. However, it was palladium pricing which continued to take the spotlight as that metal gained $15.30, a gain of 1.30%, and is now trading at $1192.60 which is a new all-time record closing price. Although palladium has traded to an intraday high of $1199 per ounce, it’s former record closing price was $1185. Based on our technical studies utilizing a Fibonacci extension we believe Palladium prices could trade is high as $1241.30 per ounce.
Currently our technical studies indicate strong support for gold futures at $1245, this representing the 50% Fibonacci retracement level. Resistance resides first at the 200-day moving average which is currently at $1259.20, followed by the .38% Fibonacci retracement at $1275.
Wishing you as always, good trading,