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 $1,335.30 an ounce and was trading at $1,326.61 by 0645 GMT, up 0.9 percent. The metal rallied as much as 8 percent on Friday to peak at $1,358.20, the highest since March 2014.
US gold for August delivery was up 0.7 percent at $1,331.10 an ounce.
"In the next week or two, we think gold could push towards $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 $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."
Comments
Comments are closed.