Gold gets back in the game as global investors seek post-Brexit safe havens
Published 26/06/2016 | 02:30
Gold soared as much as 8pc to its highest in more than two years on Friday after Britain delivered its shock vote to leave the European Union, sending investors scurrying for protection in bullion and other assets perceived as lower risk.
In sterling terms, gold delivered double-digit percentage gains to top £1,000 an ounce for the first time in more than three years, rallying as much as 21pc in early trade, while euro-priced gold rose as much as 13pc.
Spot gold peaked at $1,358.20 per ounce and was up 4.9pc at $1,317.20 close of business Friday. US gold futures for August settled up 4.7pc at $1,322.4 per oz, off an early high of $1,362.60.
"Brexit benefits gold because in a general risk-off mode, it's a natural safe haven for everybody," Marie Owens Thomsen, chief economist at Indosuez Wealth Management, said.
"Now that the UK has voted to leave, we think there's a higher probability that the $1,350-$1,360-per-ounce level can be breached, and we're therefore looking for an extended target in the $1,400s."
Gold priced in sterling was last at £961.82 an ounce, up 14pc, having peaked at £1,019.03 overnight. Euro-denominated gold was up 7.3pc at ¤1,182.47 an ounce, off a high of ¤1,244.34.
"This is just the beginning of pricing in the risk of Britain leaving the EU, and in the longer term, whether other countries will try to leave or even if the EU will survive," said Joe Foster, portfolio manager and strategist of VanEck International Investors Gold Fund in New York.
Gold dealers in London reported surging demand for coins and bars among retail investors on Friday, with some saying stocks were tight.
Global stock markets lost about $2 trillion in value while sterling suffered a record one-day plunge to a 31-year low.
Sunday Indo Business