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Gold weaker in Asia as Brexit vote day dawns, polls tight

Investing.com -

Investing.com - Gold eased in Asia on Thursday as opinion polls on the eve of the historic Brexit referendum in the U.K. showed a potential tight outcome, though sentiment leaned to the remain camp.

On the Comex division of the New York Mercantile Exchange, gold for August delivery eased 0.42% to $1,264.70 a troy ounce.

Silver futures for July delivery fell 0.39% to $17.245 a troy ounce, while copper futures for July delivery inched up 0.14% to $2.137 a pound.

Overnight, gold fell to fresh two-week lows before paring some of the losses.

On Wednesday, the FTSE 100 gained 57 points or 0.9% to 6,284, closing at a two-week high. With the continued gains, U.K. equities returned to a level from earlier this month before the "Leave" campaign in Thursday's highly-anticipated vote began to gain momentum. Analysts at UBS added a twist by offering predictions that the FTSE could plummet by 20% if the U.K. decides to leave the European Union. Billionaire investor George Soros said Tuesday that the British Pound could also fall 20% given such a scenario.

Over the last few months, prominent politicians and economists such as U.K. prime minister David Cameron, Germany chancellor Angela Merkel and International Monetary Fund managing director Christine Lagarde have issued stark warnings on the ramifications of a potential Brexit. At the same time, House of Commons Leader Chris Grayling, Culture Secretary John Whittingdale and former London mayor Boris Johnson have shown support for the Leave movement.

In Washington D.C., Federal Reserve chair Janet Yellen reiterated her stance that a vote supporting a Brexit could have serious consequences on the global economy and financial markets. In testimony on Capitol Hill, Yellen told the House Financial Services Committee that she has yet to schedule an emergency meeting at week's end in the likelihood that the Remain camp is defeated.

A Leave vote is regarded as bullish for gold, as investors pile into the safe-haven asset due to increased fears that a British departure from the European bloc could trigger a recession throughout the euro zone. Notably, it will take the U.K. a minimum of two years to leave the EU if the Leave campaign prevails.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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