Home Alternative Investments Gold Rush: Precious metal touches new 2-year high amid rush for safe haven assets

Gold Rush: Precious metal touches new 2-year high amid rush for safe haven assets

by Paul

Gold prices surged to a two-year high in Asia trade on Wednesday, continuing the rush to haven assets since the U.K. voted to leave the European Union.

Spot gold hit an intraday high of $1,371.23 (£1,055.51) per troy ounce, before slipping to $1,368.15 (£1,053.40) per ounce.

Investors have been snapping up gold as the value of the euro and pound sterling have fallen in the wake of the Brexit vote. The pound GBPUSD, -0.2688% slumped to a 31-year low overnight, and comments from the Bank of England renewed worries about prolonged uncertainty in Europe. BOE Governor Mark Carney said Tuesday the central bank wouldn’t be able to completely mitigate economic pain.

“Right now, it is the safe-haven demand for gold that is dominating. The feeling among investors is there is a lot of risk, so let us pile into gold,” said Gnanasekar Thiagarajan, director of Commtrendz Risk Management.

The next big driver of gold prices GCQ6, +0.60% will be the release on Wednesday of the U.S. Federal Reserve’s committee notes from its last meeting. The U.S. Federal Open Market Committee kept rates unchanged at its June 14-15 meeting, and the minutes are likely to provide insights into that decision as well as about its intentions on rates in the future.

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