A late decline erases gains for US stock market indexes
On a topsy-turvy Thursday, the safe haven asset breached the $1,300 level and hit a peak of $1,315.55 to touch a near two year high before turning one percent lower following the suspension of campaigning for next week’s Brexit referendum in Britain. The 10-year JGB yield added half a basis point to minus 0.190 percent, after plumbing a record low of minus 0.210 before the BOJ’s announcement. There is grave uncertainty about whether British voters will choose to exit the European Union in a June 23 referendum.
USA gold futures GCv1 for August delivery settled up 0.8 percent at $1,298.40 an ounce.
But Lawler said the modest rebound from a sharp sell-off at the start of the week “is more a function of short-covering ahead of the Federal Reserve meeting than any sudden desire to take risk”. Polls show that the vote could go either way and investors are starting to worry about the consequences. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.2 basis points to a almost four-year closing low of 1.564%.
On Wednesday, the Federal Open Market Committee (FOMC) left the target range on its benchmark Federal Funds Rate unchanged at a level between 0.25% and 0.50%.
Nike added 1.3%, the most in the Dow Jones industrial average.
Expectations that the USA central bank would press ahead with rate hikes over the summer faded earlier this month after the release of weak US payrolls data for May.
“In line with our expectations, gold has continued to strengthen, reflecting stronger ETF buying and speculative interest - investors have turned more defensive amid heightened uncertainty stemming from the United Kingdom referendum”, FastMarkets analyst Boris Mikanikrezai said.
During her press conference, Yellen said Fed policymakers said the upcoming vote was one of the reasons why the central bank kept interest rates unchanged.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday.
ENERGY: Benchmark U.S. crude oil rose 22 cents to $48.71 a barrel in NY. The bond yields, which drop as bond prices rise, are also under pressure from central banks’ ultra-loose monetary policy.
In individual companies, Synchrony Financial plunged 3.99 U.S. dollars, or 13%, to 26.45 USA dollars after the company disclosed that more of its customers were falling behind on payments.
The Bank of England escalated its warnings about fallout from the referendum, saying it could harm the global economy and that sterling looked increasingly likely to fall further after any “Out” decision. West Texas Intermediate was down 1.5% to $47.31 a barrel while Brent crude was 1.4% weaker at $48.24.
The Bank of Japan announced its decision to hold interest rates steady overnight and did not offer additional monetary stimulus. The euro edged up to $1.1245 from $1.1205.