Gold Extends Biggest Rally in Seven Years as Brexit Hits Markets

Investors seeking haven as European equities, pound decline.

by Ranjeetha Pakiam and Yuliya Fedorinova (Bloomberg)
Mine Web

Gold extended the biggest surge in seven years as the fallout from the UK’s decision to leave the European Union boosted haven demand.

Bullion rose for a second day as the pound extended a record selloff and European equities fell to the lowest since February. Gold jumped 4.7% on Friday as the referendum result caused turmoil across global markets, spurring a $4.3 billion surge in holdings in bullion-backed funds, the most in four years.

Gold has rallied 25% this year as investors sought a protection of wealth and the Federal Reserve indicated it would keep interest rates low. Prices may reach $1 424 an ounce, 7.4% higher than now, by year-end, according a Bloomberg survey of analysts and traders from New York to London conducted Friday. Goldman Sachs Group raised its outlook for gold over the next year by $100 an ounce.

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