The market turmoil sparked by yesterday’s Brexit vote has not been confined to currencies, stocks and bond markets. Commodities have also shown wild swings, most notably in the gold price, which in early trading spiked to as high $1,351 an ounce as investors moved into safe havens amid what is likely to be further extreme volatility. Though these gains have pared back, the rise pushes the gold price through the $1,300 resistance level it has flirted with in recent weeks and the expectation is that the $1,400 level will be passed.
Sterling-denominated gold has fared even better. At pixel time, the yellow metal had risen to £953 an ounce, a level not seen in more than three years.
Inevitably – as we explained in last week’s feature on the case for gold – this has been good news for the metal’s miners. Some of the larger stocks in the precious metals space have done remarkably well. Gains include Randgold Resources (RRS), this morning's biggest stock market riser at 16 per cent higher, Acacia Mining (ACA), up 14 per cent, followed by Fresnillo (FRES), 12 per cent to the good, and Centamin (CEY) and Pan African Resources (PAF), 8 per cent and 11 per cent higher respectively.
The other precious metals have also fared well, with silver up more than 2 per cent in US dollar terms, and platinum also trading higher.
Elsewhere, mining investors have had a painful morning so far, though for the largest resources stocks share price declines have generally been capped below the drop in the FTSE 100. Commodities giants Rio Tinto (RIO) and BHP Billiton (BLT) are down 1.5 per cent and 2.6 per cent respectively, while the more highly-leveraged Glencore (GLEN) opened 5 per cent lower.
The falls are less likely to be linked to anticipated impact on demand, but because industrial metals closely track movements in the US dollar. Markets today will be weighing how a strengthening in the greenback could hit commodity prices.
A similar pattern is emerging in oil markets, with Brent crude also down around 4 per cent to $48 a barrel this morning. Like other commodities, short term movements in the price of oil are affected by currency moves and traders’ risk appetite. Both Royal Dutch Shell (RDSB) and BP (BP.) were 2 per cent down in early trading.
Read all our Brexit reaction:
Carney talks up capital levels
Consumer confidence could see 'significant swings'
