Despite the volatility of the markets resulting from the United Kingdom’s vote to leave the European Union (EU), gold products have remained calm, once again positioned as the safest haven for investors looking to hedge their portfolios against economic turmoil and Brexit’s long-term ramifications. Gold surged after the referendum was held, reaching $1,340 per ounce before retreating. While $1,340 was the resistance target in recent months, many believe resistance will be closer to $1,580 in the near future.
As a result, many analysts and investors are bullish on the performance of gold products and other precious metals for the third and fourth quarters of 2016. The growing trend for investment in gold was already taking place, but it was definitely fueled by the United Kingdom’s Brexit vote. Fallout may prompt central bank policy makers across the globe to consider steps to counteract the implications of Brexit such as increasing easing, which can weaken currencies and indeed prompt more investment in gold.
Bullion-backed products have surged In the aftermath of the vote last week, reaching their highest levels since third quarter of 2013: $1358.54. This growth has prompted many banks to raise their price forecasts, such as the Goldman Sachs Group Inc.
As investors continue to focus on the long-term implications of Brexit, it makes perfect sense that gold will eclipse its highest price in years and continue to exceed forecasts. Since the beginning of 2016, gold is up more than 20 percent—and now with Brexit and the British pound at its lowest level in 31 years, many are banking that prices will continue to increase.
Other precious metals are rallying as well—this week, silver soared to $18.388 per ounce and copper rose to $2,186 per pound.
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