Investors are increasingly going for Gold as a safe haven option following today’s surprise Brexit vote.

The UK’s EU Referendum result, which saw 52 per cent elect to exit the European Union, prompted the pound to plunge to a 30-year low against the US dollar this morning, as uncertainty spread. Uncertainty and economic volatility have always been good friends of gold, the traditional safe haven asset.

Its value has risen 22 per cent overnight, according to BullionVault.com. Speaking to the The Guardian, the company notes that when the polls closed last night, gold’s value was $1,256.50 an ounce, rising to $1,336.66 in the morning.

“The surging gold price clearly shows the panic sweeping financial markets. Gold jumped 22 per cent against the pound overnight, its fastest ever move, leaping to new third-year highs above £1,000 per ounce,” says Adrian Ash, Head of Research for the site.

“This is just the kind of crisis which gold helps savers and investors insure against.”

The Royal Mint also reported that visits to its bullion trading platform jumped by more than five times compared to the previous day, as demand for gold bars and coins climbed. Google also tweeted that searches for “buy gold” in the early hours of the morning spiked by 500 per cent.

+500% spike in searches for "buy gold" in the past four hourshttps://t.co/pmMsRUcAwK

— GoogleTrends (@GoogleTrends) June 24, 2016

Brexit gold buyers search for home safes

23rd June 2016

Searches for safes are rising online, as people increasingly buy gold to insure against a downturn in the event of a Brexit.

Data published by The Telegraph found that Google searches for the phrase “home safe” are now at the 61 per cent of the level they were at in November 2008, a time that saw investors pile into the precious metal sector as a safe haven against the financial crisis. While 61 per cent may not sound like much, it is the highest level searches for safes have been at since then.

Royal Mint, the UK’s official producer of gold and silver, told the newspaper that sales have risen by 32 per cent in the last month, although some of that rise in interest will be driven by the recent announcement that Royal Mint gold can now be held within pensions.

Gold sentiment becomes bullish as US rate hike remains elusive

10th June 2016

Gold sentiment is becoming bullish once again, as the previously expected US rate hike remains elusive.

The precious metal had a strong start to the year, on the back of increasingly bearish statements from the US Federal Reserve about further rate hikes, following the first increase in December. In the first four months of 2016, gold values rose more than 16 per cent and neared the $1,300 an ounce mark. Since then, gold has weakened, despite the uncertainty surrounding the result of the UK’s looming EU Referendum.

Now, though, comments from US Fed Chair Janet Yellen CNBC that gold prices will “likely resume their bull run of earlier this year”.

Indeed, uncertainty still surrounds the UK’s potential Brexit, which ANZ says could push gold prices as high as $1,400 an ounce, as demand for safe haven assets, such as gold, would increase in the event of the UK leaving the EU.

The positive sentiment arrives after a period of weaker demand in India and China, with the former suffering from a strike by jewellers. In Japan, however, the country’s largest bullion retailer, Tanaka Kikinzoku Kogyo, says gold bar sales have risen 35 per cent year-on-year in Q1 2016.

Gold outlook mixed amid EU Referendum and US rate hike

The outlook for gold is mixed, thanks to the uncertainty surrounding the UK’s EU Referendum and the announcement that the US may be about to rise its rates.

The precious metal has long been a safe haven asset for alternative investors or those simply seeking a less volatile product to diversify their existing investment portfolio. Economic uncertainty and a weak dollar are both good news for gold, as they typically trigger a surge in demand and, as a result, value.

According to The Telegraph, gold’s value has risen 20 per cent since te start of 2016. For those seeking another way to invest in the metal aside from bullion, gold funds have become attractive, due to their typically heightened performance on the back of the metal market. Indeed, the newspaper notes that gold funds have recorded “incredible gains” since the beginning of the year, with MFM Junior Gold returning 107 per cent in six months.

“Gold has staged a rapid turnaround. At the end of April, the gold price moved above the $1,260 an ounce level, taking it 20pc above its December 2015 low of $1,050. It is currently around the $1,245 mark,” reports the publication.

The figures follow a significant period of downturn in recent years, with the price of physical gold dipping 21 per cent between 2011 and the end of 2015. True to form, the FTSE Gold Mines Index lost 75 per cent over those years, again amplifying the market’s shifts.

As long as mining companies keep their production costs below gold’s price, they make a profit, which means that rising values are very good news for fund investors. Some, though, can let costs balloon out of control. Nonetheless, conditions are ripe for gold right now, as the UK debates whether to stay in or leave the European Union.

“Another bullish driver of gold may be the potential for hedging ahead of the UK’s referendum on EU membership,” forecasts James Steel, Chief Precious Metals Analyst at HSBC. “We continue to see the potential for gold to reach $1,300/oz this year. As well as a weaker dollar, we see global risks and a modest recovery in oil prices as gold-bullish.”

At the same time, though, the US Federal Reserve has revealed that it could lift cash rates within weeks, following positive
US economic data. As a result, the dollar would grow too, which would weigh upon gold prices.