NEW YORK, June 24, 2016 /CNW/ - FinancialBuzz.com (http://www.FinancialBuzz.com ) : The surprising results of Britain's referendum vote to leave the European Union, or Brexit, made the British pound crash to its lowest levels in about 30 years. Global markets followed, the Dow Jones, the NASDAQ, and the S&P 500 all dropped more than 2 percent. Asian markets plummeted as well, as Japan's benchmark Nikkei 225 closed 7.9 percent down, the biggest one day fall since the 2011 tsunami. Direxion Shares Exchange Traded Fund Trust (NYSEARCA: NUGT), Brazil Resources Inc. (BRI.V), Market Vectors Gold Miners ETF (NYSEARCA: GDX), Market Vectors Junior Gold Miners ETF (NYSEARCA: GDXJ), Barrick Gold Corporation (NYSE: ABX)
As usual under such circumstances, investors are looking for safe haven assets, like Gold, the price of which has jumped about $60 at some point, crossing the $1,329 per oz. before retreating a little. Direxion Shares Exchange Traded Fund Trust (NUGT) is up more than 15 percent, a fitting end to a strong month. NUGT is up more than 50 percent since the beginning of June.
Market Vectors Junior Gold Miners ETF (NYSEARCA: GDXJ) is up about 5 percent, and small cap companies such as Brazil Resources Inc. (TSX-V: BRI), have continued to trend higher up, about 7.5 percent after Brexit. Brazil Resources Inc. puts their attention on development and acquisition of projects producing gold districts and other mineral properties in Brazil, the United States, Canada, and Paraguay. With a market cap of just 148 million, it is one of the most active companies in the US and Canadian gold sector, surging 390 percent year to date.
Market Vectors Gold Miners ETF (NYSEARCA: GDX) is up 5.3 percent, and large cap gold stocks like Barrick Gold Corporation (NYSE: ABX) showed strength. The stock was up more than 10 percent during Thursday pre-market trading hours. Barrick Gold Corporation shares increased in value about 175 percent year to date.
The British pound may suffer more, as Scotland, where 62 percent of the population voted to "Remain" in the European Union, may seek independence once again. Scotland's First Minister Nicola Sturgeon said a second referendum on independence from the United Kingdom is now back "on the table." Such political disagreements are only expected to become more common. As a result of Brexit market volatility is here to stay, and demand for safe haven assets to remain strong.
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