Gold surged to the highest level in more than two years in a frantic global hunt for haven assets as Britain’s voters were projected to back leaving the European Union after a historic poll.
Bullion for immediate delivery jumped as much as 8.1 percent to $1,358.54 an ounce, the highest price since March 2014, and traded at $1,328.90 at 5:09 a.m. in London, according to Bloomberg generic pricing. The rally was the biggest daily jump since 2008, setting off a surge in shares of gold producers.
“Gold will be a preferred safe-haven asset with a ‘Leave’ vote,” said Barnabas Gan, an economist at Singapore-based Oversea-Chinese Banking Corp, who forecast that it could rally to as much as $1,400 if ‘Remain’ loses. Bullion’s expected to remain volatile until the final verdict is out, according to Gan.
Bullion powered ahead amid turmoil in global financial markets as the pound was driven the lowest level in more than three decades, equities tanked and investors fled from risky assets. As figures from local counts came in on Friday, BBC News predicted that the ‘Leave’ camp would win, following similar calls from JPMorgan Chase & Co. and ITV News. With 306 of 382 areas declared, ‘Leave’ had 12.9 million votes, while ‘Remain’ was at 12.1 million.
“As the votes have started to be announced, it seems more and more that the ‘Leave’ vote is a lot stronger than expected,” said David Govett, head of precious metals at Marex Spectron Group Ltd., a broker in London. “Gold is essentially following sterling, albeit in the opposite direction.”
Priced in sterling, bullion advanced to more than 1,000 pounds an ounce after rising 18.5 percent. Among miners, Newcrest Mining Ltd., Australia’s biggest producer, advanced as much as 8 percent to the highest level since February 2013 as Evolution Mining Ltd. surged 19 percent.
Societe Generale SA predicted whatever decision is reached in the U.K. on its ties with the world’s largest trading bloc, volatility in bullion should increase. The bank recommended investors buy a so-called gold-variance swap, which gains in value as volatility increases. A decision to leave may lift prices to as much as $1,400, it said in a note this week.
While bullion prices have declined ahead of Britain’s landmark referendum, holdings in exchange-traded funds have kept expanding. The assets were little changed at 1,904.3 metric tons on Wednesday after rising for 16 days to the highest level since October 2013, according to data compiled by Bloomberg.
Until the nationwide result in Britain is finally out “it could be a volatile day for gold, particularly if it looks like it will be a close outcome,” said Shane Oliver, the Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $116 billion.
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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