Gold prices soared to multiyear highs in London on the back of safe haven demand as theU.K. was projected to have voted to leave the European Union after a historic referendum.
Spot gold was up 5.3% at $1,319 a troy ounce in early morning European trade Friday, having hit its highest level since March 2014 earlier in the session at $1,358.80 an ounce.
“The precious metal is on fire and it is the real winner of Brexit situation,“ said Naeem Aslam, chief market analyst at ”Investors are really trying to protect their investment and we are seeing some big bets coming in the market which is pushing the metal price higher.
In a closely-fought campaign that was largely unanticipated by financial markets, Britons voted to leave the European Union. The move represents a startling rebuke to the establishment and threatens to spark political turmoil in the U.K. and more widely across an increasingly fractious eurozone.
Gold rallied $100 from where it was trading before the results and is currently trading 25% higher than the first session of the year, in contrast to other financial markets. The metal is considered a traditional safe haven asset and attracts buying in times of heightened economic and financial instability.
Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London. PHOTO: REUTERS
“The projected result has led to a massive rally in gold,” said David Govett, head of precious metals trading at Marex Spectron, who was in his office all night. Gold has likely moved high enough on the upside for now. “But in the long-term, I would look for it probably to go higher.”
Among the other precious metals, spot silver was up 3.1% at $17.804 an ounce, spot platinum was up 2.4% at $982.32 an ounce, while spot palladium was down 1.8% at $553.29 an ounce.
Write to Ese Erheriene at ese.erheriene@wsj.com
