close
This ad will auto close in 10 seconds

Gold price climbs 1%, investors seek safe-haven after 'Brexit' vote

Spot gold had risen 1.30 percent to USD 1,332.55 an ounce, after touching a high of USD 1,335.30 earlier in the day. Bullion prices surged by 4.8 percent in the previous session to top out at USD 1,358.20 - the highest since March 2014.


Gold price climbs 1%, investors seek safe-haven after 'Brexit' vote

Bengaluru: Gold climbed on Monday, trading near a more than two-year peak reached in the previous session, as investors sought refuge in the safe-haven amid economic and political uncertainty after Britain voted to exit the European Union.

Bullion surged 4.8 percent on Friday, its biggest single-day gain since January 2009, as the British exit, or Brexit, forced a selloff in risky assets from industrial commodities to stocks and sterling. The pound and Asian stocks continued to reel on Monday.

Finance minister George Osborne said Britain`s vote to leave the bloc was likely to lead to further volatility on financial markets but said the economy was about as strong as it could be to cope with the challenge ahead.

Spot gold rose as much as 1.5 percent to USD 1,335.30 an ounce and was trading at USD 1,326.61 by 0645 GMT, up 0.9 percent. The metal rallied as much as 8 percent on Friday to peak at USD 1,358.20, the highest since March 2014.

US gold for August delivery was up 0.7 percent at USD 1,331.10 an ounce.

"In the next week or two, we think gold could push towards USD 1,400," said ANZ commodity strategist Daniel Hynes, adding that a weak US  dollar and a dovish Federal Reserve would also support bullion.

The referendum verdict likely means the Fed`s ambitions for two rate rises this year have been placed on hold, analysts and experts say.

HSBC said it believes "gold may reach USD 1,400 an ounce on a `safe-haven` bid generated by the UK vote". "It is even possible that gold may trade higher longer term if the UK vote creates wider EU concerns."

Goldman Sachs too has raised its gold price forecasts saying Brexit suggested a more sustainable impact on the trajectory of US interest rates.

According to Macquarie Research: "Gold price will go higher in the third quarter as the full ramifications of Brexit begin to be felt but expect it to fall back in fourth quarter after the US election and as the Fed gets ready to hike again." It increased its third-quarter forecast to USD 1,350.

Holdings in SPDR Gold Trust GLD, the world`s largest gold-backed exchange-traded fund, jumped 2 percent to 934.31 tonnes on Friday, the highest since July 2013.

Spot silver rose 0.5 percent to USD 17.78 per ounce, after hitting its highest since January 2015 on Friday.

Platinum rose 0.6 percent to USD 986.15 an ounce and palladium was up 0.7 percent at USD 550.65

From Zee News

0 Comment - Join the Discussions