The markets closed Monday with gold prices reaching a four week high. The precious metal’s appeal as a safe haven is fueling investors who are growing increasingly more uncomfortable about the uncertainty caused by the United Kingdom’s potential departure from the European Union (EU). As more and more savvy investors seek to buy precious metals to hedge their portfolios, there is indication that prices will climb even higher this year.
Nicknamed “Brexit,” the impending referendum will be decided upon in a British vote taking place on June 23. The impact Britain’s departure from the EU could have on the global economy is highly unpredictable at this juncture—and has prompted many famed investors and hedge managers to increase their holdings in previous metals.
Gold prices at the end of day on Monday
The price of gold rose to $1,286.90 per ounce, up 0.9 percent. This is the highest level it has traded at since May 16.
The economic uncertainty of the implications of Brexit has seemed to affect the price of gold more than other asset classes, though the weakened dollar is contributing to the continued surge as well. If Brexit does take place, many jobs may be cut within companies across the United Kingdom—for example, JP Morgan CEO Jamie Dimon gave a message to members of the renowned banking institution, warning that up to 4000 jobs could be cut if Brexit occurs. As it is currently the financial center for Europe, the United Kingdom’s exit from the EU would also significantly impact American companies with global business interests. Many experts predict it will be a negative impact, triggering economic problems for a substantial number of companies across the globe. It may also negatively affect trade and investment between the United States and Europe.
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