It’s been a relatively steady month for the gold price throughout June, right up until the end of the month when prices took a downturn. The spot gold price ended the month at £957.41 per troy ounce on the 30th at 16:17 following a high of £1003.80 on the 6th.
The uncertainty surrounding the UK General Election on 8th June saw the gold bullion price drop momentarily to £987.44, but it soon rose again to £1000.56 by the end of the day. With the announcement of a hung parliament in the early hours of the 9th, the gold price fell slightly to end on £993.79 by the close of play that day.
A big low hit on the 26th which was triggered by an apparently accidental sell order, which pushed the gold bullion price to a 5-week low, Reuters reported.
According to Afshin Nabavi, head of trading at MKS in Switzerland, the huge sale of 18,500 lots of gold (totalling 1.85 million ounces) on COMEX in a short period of time was the cause of falling prices.
“Clearly somebody sold it by mistake and bought it back quickly, triggering stops below $1,250,” MKS trader Bernard Sin told Reuters. Despite the shock to the market, experts don’t predict it’ll have any lasting effect. “The gold market is seeing a bit of a bid right now. Growing tensions in the Middle East may be playing a part,” INTL FCStone’s Ed Meir told the news agency. MKS’s Sin agreed: “The world is in geopolitical chaos and gold is still good insurance.”
The Italian banking sector’s debts, concerns over President Trump’s alleged connections with Russia and the uncertainty in Britain surrounding Brexit talks are also driving apprehensions about global instability, which tends to work in gold’s favour.
ABN Amro analyst Georgette Boele told Reuters: “The market is sceptical about Fed rate rises this year and next. Overall we’re optimistic about the outlook for gold, we [see] a weaker dollar later in the year.” So what next for gold bullion? Well the weakened dollar is certainly one to watch as are the mounting issues in the Middle East and in particular relations between Saudi and Qatar. While the end of June has put a dampener on price rises, traders still have high hopes for gold in 2017 and the ongoing global turbulence certainly isn’t letting them down.