What's Driving Gold Higher? (Hint: It's Not Brexit)
Gary Savage | Jun 23, 2016 12:59AM ET
Almost everyone is assuming the Brexit vote is going to be negative for gold. But gold hasn't been going up because of Brexit. The market has known for months that Brexit is going to fail.
Gold has been rising because the dollar is falling. When Brexit fails, that should be bullish for the euro—the very thing that has been driving gold higher. This will also be bullish for miners, though in the shorter term they may be anticipating a half cycle low.
Note the relationship between the USD and gold on the chart below. Just as soon as the dollar formed its double top and began a new bear market, gold started rising.
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