It’s official. In a stunning referendum vote, the U.K. decided to leave the European Union. It’s not what the pundits or poll watchers were expecting as the world woke up to the news on Friday. The effect on the global financial markets was both immediate and impactful.
Investors quickly moved, quite predictably, to the safe haven of precious metals. Gold smashed through the $1,300/oz. barrier—trading as high as $1,358.20/oz., its highest water mark in over two years. Some strategists are openly stating that the yellow metal will go even higher, perhaps over $1,400/oz.
Other precious metals and related exchange traded funds didn’t fare so bad either. SPDR Gold Trust GLD, the largest of these funds, rose two percent to 934.31 tons on Friday, its biggest spike since July 2013.
Platinum was up 0.6 percent to $986.15 per oz. and palladium rose 0.7 percent to $550.65.
That’s four for four in spot price spikes for the precious metals participants.
The Brexit Vote also has many predicting that this unexpected turn of events will all but close out any talk of a further Fed interest rate hike here at home for the remainder of 2016.
While we’re admittedly excited in this increased value and interest in the precious metals market, what long term effects may occur as a result of this historic vote remain to be seen. Stay tuned…
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