Gold tested two-weeks low today as markets became more confident about Britain’s stay in the European Union. Gold Futures for August delivery slipped 0.14% to $1,270.75.
Nervousness ahead of referendum
With the Brexit vote happening tomorrow, traders are anticipating a ‘Remain’ vote, but any surprises contradicting that could mean robust gains in gold, according to James Gardiner, MKS Group trader. Meanwhile, other analysts hold the view that it is too early to predict the outcome of the referendum. INTLFCStone analyst, Edward Meir, said that accuracy of British polls remains a question and thus, they are focusing less on recent results.
As per the latest opinion poll, Remain campaign is ahead of Leave by one point. Apart from the UK referendum, U.S. Dollar (CURRENCY:USD) movements and oil prices will influence gold trading. While traders are mostly looking at the Brexit outcome, a set of analysts has warned that a run-up in the greenback and oil can still drag down metals prices despite the UK’s exit from EU. Holdings in SPDR Gold Trust (ETF)(NYSEARCA:GLD) surged 0.39% to 912.33 tonnes yesterday.
Goldcorp buys 19.9% stake in Independence Gold
As gold traders are sitting tight waiting on the sidelines, Goldcorp Inc. (NYSE:GG) has made a major move in the gold mining space. The company has entered into an agreement to buy 10,884,880 common shares of Independence Gold Corp. The price of each share is fixed at C$0.1333 per share, taking the total purchase price to C$1,450,954.50. Following the purchase, Goldcorp will own a 19.9% stake in Independence Gold.
Besides this, Sandstorm Gold Ltd (NYSEMKT:SAND) has been given a ‘market perform’ rating by analysts at BMO Capital Markets. The research firm has assigned a price target of $4.50 a share to the stock. Sandstorm came into BMO’s coverage radar after showing an impressive improvement in its asset and counterparty quality.