Gold, silver soar

NEW YORK: Gold rose on Wednesday as the dollar retreated and investor appetite for safe assets remained strong because of longer-term financial uncertainty after Britain’s surprise vote to leave the European Union.

Silver rose to a 1-1/2-year high, while platinum and palladium each rallied more than 3 percent.

Bullion was still below its Friday peak — the highest since March 2014 at $1,358.20 an ounce — when the shock vote caused gold prices to surge more than 8 percent as the metal is often perceived as a hedge against economic and financial risk.

Spot gold was up 1 percent at $1,324.90 an ounce by 2:30 p.m. EDT (1830 GMT), while US gold settled up 0.7 percent at $1,326.90. Spot silver gained 3.9 percent to an 18-month high of $18.44.

“Although there are still big uncertainties ahead, looking at the way equities have performed over the past couple of days, a risk-on mentality is definitely coming back,” Mitsubishi Corp Jonathan Butler said.

“In the medium term, gold is going to be supported by the unlikelihood that the Fed will raise rates in the next couple of months.”

Global stock markets continued to recover after last week’s hefty losses, while the dollar was down 0.5 percent against a basket of leading currencies.

“If Brexit is seen severely impacting the market, central banks will step in to calm the markets, which would not be good for gold,” said Jiang Shu, chief analyst at Shandong Gold Group.

European leaders have asked Britain to act quickly to resolve the political and economic confusion unleashed by the so-called Brexit vote.

“People are really beginning to wake up to the reverberations of Brexit, not just the U.K. but Europe, the United States and the rest of the world,” said Philip Diehl, president of US Money Reserve.

“Brexit is like a 7 on the Richter scale. Is this the big shock or is this a foreshock of what’s to come?”

Markets will continue to monitor US economic data for clues on the timing of the next rise in US interest rates.

“The uncertainty around Britain’s vote has taken center stage and unless US payrolls data comes up much higher than expected, I doubt it will change the Federal Reserve’s timing of rate increases,” Commerzbank analyst Carsten Fritsch said.

Low interest rates are positive for gold prices.

Platinum climbed 3.8 pct to its highest in three weeks at $1,010.56 and palladium rose 4 percent to $590.40, the highest since mid-May.

Wheat, corn plummet

CHICAGO: US wheat futures fell on Wednesday, extending their decline under pressure from the ongoing harvest of a bountiful crop in the Plains and the Midwest which threatens to add to a glut of supplies that is largely being shunned by overseas buyers.

Corn futures also dropped, pressured by forecasts for rain in key US growing areas, and soyabeans fell as traders staked out positions ahead of a key US Agriculture Department report on Thursday.

The most actively traded Chicago Board of Trade soft red winter wheat contract sank 2.8 percent, hitting its lowest since March 2 and notching its fourth straight negative session. K.C. hard red winter wheat staked out a fresh 10-year low and closed lower for the fifth day in a row.

CBOT September soft red winter wheat settled down 12-3/4 cents at $4.44-1/2 a bushel. K.C. September hard red winter wheat was 8-1/2 cents lower at $4.19-3/4 a bushel.

CBOT December corn was down 11-1/4 cents at $3.83 a bushel and CBOT November soyabeans dropped 7-3/4 cents to $11.12-1/2 a bushel.

Some forecasts for rain in dry parts of the US Midwest during the weekend added pressure to both corn and soyabeans.

US farmers may have increased soyabean sowings to 83.8 million acres this year, up from the USDA’s March estimate of 82.2 million acres, analysts said ahead of the release of the USDA’s annual acreage report on Thursday.

As they switched to soyabeans, US farmers may have cut corn plantings to 92.8 million acres, from 93.6 million forecast by the USDA in March.—Reuters