Gold prices touch two-week low as Britain gears up for EU vote

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Bengaluru | Published: June 23, 2016 7:17:44 AM

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.39 percent to 915.90 tonnes on Wednesday, the highest since September 2013.

US gold was down 0.4 percent to ,265.30. (Reuters)US gold was down 0.4 percent to ,265.30. (Reuters)

Gold touched a fresh two-week low early on Thursday on cautious optimism that British voters would opt to stay in the European Union at referendum later in the session, thereby boosting Asian stocks and reducing risk aversion.

FUNDAMENTALS

* Spot gold fell 0.3 percent to $1,262.26 an ounce by 0057 GMT. Bullion touched a low of $1,260.36 earlier in the session, its worst level since June 9.

* US gold was down 0.4 percent to $1,265.30.

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* The campaign to keep Britain in the European Union got a boost from two opinion polls published late on Wednesday, a few hours before voters begin to cast their votes in a historic EU membership referendum.

* A vote by Britain to leave the 28-member EU, dubbed “Brexit,” could tip Europe back into recession, putting more pressure on the global economy, thereby boosting the safe haven appeal of gold. Polling will take place between 0600-2100 GMT on Thursday, with the results expected early on Friday.

* Asian shares edged up, while the pound rose to a six-month high against the dollar.

* Federal Reserve Chair Janet Yellen said she has not scheduled special meetings for Friday or Saturday in order to respond to the “Brexit” vote.

* US home resales rose in May to a more than nine-year high amid low mortgage rates, pointing to sustained housing market strength that should keep the economy on solid ground.

* International Monetary Fund Managing Director Christine Lagarde said on Wednesday that the Federal Reserve should avoid “abrupt” interest rate moves and focus on stability in its monetary policy.

* Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.39 percent to 915.90 tonnes on Wednesday, the highest since September 2013.

* Gold’s sharp gains on uncertainty over Britain’s European Union membership are likely to come to an end, regardless of whether Britons vote to leave or remain in Thursday’s referendum.

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