Gold prices pushed higher after marking a new two-week low today. There is general optimism across markets that Britain will choose to remain in the European Union. However, any decision countering these expectations could push Europe into recession, thereby, increasing appeal of the yellow metal as a safe asset.
UK vote will have near-term effect
Gold Futures for August delivery added 0.16% in the premarket to $1,272. According to HSBC analyst James Steel, gold prices will be heavily impacted by the UK referendum in the near term. Other price factors and fundamentals will come into play only after referendum results are out and known. Meanwhile, another analyst, Mark To from Wing Fung Financial Group, said that gold is likely to trade in the range from $1,250 and $1,315 in the near term.
With the UK vote results only hours away, gold investors were seen increasing their options positions. Besides this, holdings in SPDR Gold Trust (ETF) (NYSEARCA:GLD) once again surged 0.39% to 915.90 tonnes, marking the highest level since September 2013.
Gold Fields receives rating upgrade
Despite the lack of shine in gold, Gold Fields Limited (ADR) (NYSE:GFI) remained an exception as its stock jumped following a rating upgrade by RBC Capital Markets. The company was assigned an outperform rating, up from its previous “sector perform” rating. Analysts at RBC believe that Gold Fields’ South Deep mine has the potential to boost the company’s growth. Moreover, better performance by the company’s assets in Ghana and Australia have added advantage.
Apart from this, Seabridge Gold, Inc. (NYSE:SA) announced the commencement of drilling at the KSM project located in northwestern British Columbia. The project will entail 10,000 meters of drilling, which will expand by 800 meters. Additionally, the 2016 drilling program will also include 3,000 meters of core drilling on the company’s Iskut Project. It is noteworthy that the Iskut project has been acquired by the company following the closure of its deal with SnipGold Corp.