WEEKLY REPORT

Market analysis

Date: Monday, 4th of July 2016

Highlights:

• EUR/USD Rose as the European Central Bank was not considering buying government debt
• GBP/USD Fall and remaining near 31-year low
• USD/JPY Gains on safe-haven demand
• USD/CAD edges down to 1-week lows in early trade
• Gold Stays near 2-year high as rally continues
• Crude Oil Inch higher as Nigeria militants claim fresh attacks

Gold

Stays near 2-year high as rally continues

Gold prices extended gains from last week in European trade, staying near the strongest level in more than two years, while silver spiked to levels not seen since July 2014. Gold jumped $16.70, or 1.27%, last week, the fifth straight weekly gain. The precious metal rose almost 9% in June, its biggest monthly increase since February. Prices are up nearly 25% so far this year, completing one of its strongest first halves on record. Gold has been well-supported in recent sessions amid fading expectations of a Federal Reserve rate hike in the next couple of months and as investors continued to digest the political and economic aftermath of the U.K.’s decision to leave the European Union. Market players all but ruled out further rate hikes by the Fed this year in the aftermath of Britain’s vote to leave the EU. In fact, futures markets are now reflecting a chance that the Fed could actually cut interest rates before the end of the year. According to the CME Fed Watch tool, there’s currently a 0% probability of a Fed rate hike in July and a 3% probability of a rate cut.The BOJ, as expected, left its benchmark interest rate unchanged despite a surging yen and sluggish inflation. Following the decision, the yen jumped against the dollar, hitting a fresh 22-month high at 103.58. Yields on the Japan 10-Year also continued its prolonged swoon, touching down to an all-time record-low of Minus-0.21%. On Friday Gold retreated from 22-month, amid heavy profit taking, as officials suspended Brexit campaigning for a second consecutive day following the tragic death of a Parliament member, throwing next week's closely-watched referendum into limbo. a series of events ahead of next week's Brexit referendum were cancelled, as U.K. residents continued to mourn Jo Cox, a Labor Party member who was shot and stabbed to death in North Yorkshire a day earlier. Cox, who was elected to the House of Commons last year, had openly campaigned for the "Remain" camp in recent weeks.