Gold Price Surges Following Brexit Vote
June 27, 16(IDEX Online News) – Britain’s decision to leave the EU has caused a significant drop in the value of the pound and wiped billions off the value of shares on the London Stock Exchange.
However, the protracted levels of investor uncertainty have caused a surge in gold price, according to a report from the World Gold Council. It argued that the Bank of England and other national financial institutions could move interest rates into negative territory, which is another positive for gold.
On the morning after the vote, the gold price surged to $1,313.85/oz compared to $1,265.75/oz the previous morning – its highest level since 2014. UK-listed gold miners reported a 10-20-percent increase in share prices on the morning of the results.
Despite the unprecedented levels of uncertainty for UK domestic, European and world implications, gold is fulfilling its traditional safe haven role. The World Gold Council said that it expected to see strong and sustained inflows into the gold market driven by the intense market uncertainty that now faces the global markets.