Monday, July 4, 2016
The aftershocks of the UK’s decision to vote to leave the European Union are still being felt and analysts expect the gold price to climb even higher as a result.
The uncertainty in the global economy caused by the Brexit vote has sent investors worldwide scurrying to the precious metal as a safe haven for their money.
A poll of Wall Street experts and traders carried out last week by Kitco found that more than seven out of 10 (73 per cent) believe the gold price will continue to increase this week. Last week, the gold price per troy ounce climbed by 3.72 per cent from £975.29 to £1,011.53.
Much of the flight to gold by investors is due to anxiety among about what central banks around the globe will do in reaction to the economic issues raised by the UK’s decision to quit the EU.
The US dollar was slightly down last week and the pound has fallen radically in the wake of the historic vote. Analysts in the US expect this will make the US Federal Reserve less likely to raise interest rates in the immediate future due to the ongoing concerns about the global economy. However, the US markets are awaiting a raft of economic data in the coming week with jobs and payroll figures due to be published.
The gold price forecast was increased by Societe Generale last week on the back of the ongoing turbulence.
In a note, it said: “Looking ahead, it seems that gold will remain one of the major beneficiaries in the current backdrop, as heightened volatility and lingering uncertainty will keep investors' risk appetite in check.”
Investors have also been putting their cash into silver, which has jumped in value to more than £14.30 for the first time since September 2014, Reuters reported.