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Gold Surges to Highest Since ‘14 as BBC Predicts Vote for Brexit

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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.

‘Lot Stronger’

“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.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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Crude Oil

OPEC Says Uncertainties Remain High in 2021

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Nigeria's economic Productivity

OPEC Says Uncertainties Remain High in 2021

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday said global uncertainties remained high going forward in 2021 but kept its oil demand forecast unchanged.

In the cartel’s latest oil outlook for 2021, oil demand is expected to increase by 5.9 million barrels per day year on year to 95.9 million barrels per day. The prediction was unchanged from December’s assessment.

However, OPEC and allies, said: “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.

Crude oil rose to $57 per barrel this week after incoming US President Joe Biden announced it would inject $1.9 trillion stimulus into the world’s largest economy.

But the recent rally in the commodity and stimulus announcement is expected to boost US crude oil output and disrupt OPEC+ production cuts strategy for the year.

The 2021 supply outlook is now slightly more optimistic for U.S. shale with oil prices increasing, and output is expected to recover more in the second half of 2021,” OPEC said.

Still, OPEC, in its forecast “assumes a healthy recovery in economic activities including industrial production, an improving labour market and higher vehicle sales than in 2020.”

“Accordingly, oil demand is anticipated to rise steadily this year supported primarily by transportation and industrial fuels,” the group said.

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Brent Crude Oil Rose to $56.25 Per Barrel

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Brent Crude Oil Rose to $56.25 Per Barrel

Oil price surged following the declaration of Joe Biden as the President-elect of the United States of America last week after Trump’s mob invaded Capitol to disrupt a joint Senate session.

Also, the large drop in US crude inventories helped support crude oil price to over 11 months despite the second wave of COVID-19 crushing the world from Asia to Europe to America.

Brent crude oil, against which Nigerian Crude oil is priced, rose to $56.25 per barrel on Friday before pulling back to $55.422 per barrel on Monday during the London trading session.

Experts attributed the pullback to the rising number of COVID-19 cases in Asia with about 11 million people already locked down in Hebei province in China.

Covid hot spots flaring again in Asia, with 11 million people (in) lockdowns in China Hebei province… along with a touch of FED policy uncertainty has triggered some profit taking out of the gates this morning,” Stephen Innes, chief global market strategist at Axi, said in a note on Monday.

China, the world’s largest importer of crude oil, has joined the United Kingdom and others declaring full or partial lockdown to curb the second wave of COVID-19.

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