Ahead of Brexit Vote Gold Soars to 7 Month Highs

On Tuesday Gold soared to 7 months highs as investors sought a safe haven in the precious metal, ahead of 3 events, Brexit, uncertainty with U.S. China trade talks and the effect of the Huawei dispute. In addition markets are focused on the Federal Reserve decision who are waiting for the conclusion of the Sino-U.S. trade talks.

These factors have made it difficult for investors to judge the direction of the markets fleeing, seeking safety in assets such as gold.

Spot gold climbed to $1,308.45 an ounce up 0.34 percent, its highest since mid-June.

Wall Street

The S&P 500 and the Dow both closed down 0.8 percent with the Nasdaq off more than 1 percent.

According to news reports on Monday the U.S. put pressure on Venezuelan state-owned oil company PDVSA, with sanctions, increasing pressure on incumbent President Nicolas Maduro.

Brexit

U.K. Prime Minister faces the House of Commons on Tuesday with MPs to vote on a number of amendments to the EU Brexit agreement with the main issue on the ‘back stop’ in Ireland. Before the crucial vote the sterling was steady at $1.3166 and 86.88 pence to the euro. Since January 4th the pound has rallied 6 percent.
There was little change to most European government bond yields. Trade feuds and Brexit together with weaker economic data have pointed to expectations that interest rates with stay unchanged.

The FTSE 100 gained one percent.

The German DAX rose 0.8 percent.

CAC 40 in Parise rose 0.6 percent.

US-China Trade Deal

Days before trade talks between Washington and Beijing there are news reports that the U.S. has made charges against Huawei, China’s telecom giant and asked for the CEO to be extradited from Canada to the U.S.

23 charges have been filed by the U.S. against Huawei, with the Chief Financial officer, Wanzhou Meng being charged in relation to the violation of sanctions against Iran.

CMC Markets, analyst Margaret Yang said that the many uncertainties on the U.S.-China trade talks have made investors very cautious, with the center of the dispute Huawei.

US Fed

Investors believe that the Fed will take a more cautious stance on Wednesday.

Shares in Asia

Benchmark indices in Australia was down 0.5 percent, and down 1.2 percent in New Zealand. Chinese and Japanese stocks finished in the green.

Commodities

U.S. crude gained 35 cents to $52.34 a barrel.

Brent rose 37 cents to $60.30.

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