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    JM Bullion Weekly Market Preview (6/27/16)

    Market Overview: Gold is seeing some follow through buying today as risk aversion remains the central theme. Following last week’s historic vote by Great Britain to leave the European Union, investors are left wondering just how such a vote may affect the U.K. the E.U. and the global economy. While it is difficult to say just how far-reaching the ripple effects may be, the uncertainty surrounding the issue may keep risk appetite to a minimum until more clarity is seen. The Brexit vote is likely to overshadow key pieces of economic data for the time being, and could even influence the Fed with regards to interest rates.

    Key Data Points: Markets have gotten the latest readings this morning on International Trade in Goods, PMI Services Flash and the Dallas Fed manufacturing Survey.

    The PMI Services Flash registered a reading of 51.3, essentially in line with consensus estimates of 51.2. The activity in the service sector remains sluggish, and will likely contribute to deflating economic expectations for the rest of the year.

    The Dallas Fed Manufacturing Survey showed significant weakness, registering a reading of .7. Of note is the drop in new orders, at negative 14.2, while employment is nothing to smile about either at minus 11.5.

    Markets will be looking forward to numerous pieces of housing data later in the week, as well as further data on manufacturing and weekly jobless claims.

    Outside Markets: Stocks are getting hit hard today as calls for a Brexit revote are falling on deaf ears. Unfortunately for equity investors, the steep decline seen in recent hours could potentially continue as investors contemplate Brexit. The broad market S&P 500 is down nearly two percent in early action today, following steep losses seen on Friday.

    Interest rates are falling again today as risk aversion fuels buying in treasuries. The dollar index is on the rise as the British Pound and euro continue to be punished. The pound appears to be in free fall at this point, and could continue lower as the uncertainty over Brexit weighs on sentiment.

    The Big Picture: Risk aversion is the story of the day right now, and as such, investors may continue to seek the perceived safety of gold, silver, treasuries and the dollar. The slide in stocks could fuel further buying in gold and precious metals as investors seek out alternatives.

    Investors are continuing to digest the recent Brexit vote, and could remain anxious until more clarity is seen on how this vote may affect the global economy. Given the fact that Brexit is likely to be a long process, stocks could remain on the defensive for the foreseeable future while perceived safe haven assets like gold could see ongoing buying interest.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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