Gold surged to a to a two-year high as the metal was seen as a safe-haven after the Brexit votes raises investors’ concerns about the uncertainties in financial markets.
Spot gold climbed to $1,371 an ounce, the highest since March 2014. This also marks a sixth day gain for the yellow metal. Comex gold futures were up 0.7 percent to $1,368.80 an ounce.
UBS Group AG analysts are making a bullish call on gold, saying that bullion is probably at the beginning of its next bull run. They see gold price may reach $1,400 an ounce in the short term.
“Gold has likely entered the early stages of the next bull run,” Joni Teves, an analyst at UBS in London, wrote in a report e-mailed Wednesday. “This trend should now deepen, attracting more participants and encouraging those who have been hesitating to get more involved.”
Investors are seeking for the safest asset as the global economic uncertainties. The pound is not safe after the U.K. voted to leave the European Union. U.S. dollar is not safe as the presidential election is just five months away and Fed slowed its rate hike pace. Euro is stable, but investors are afraid that other countries may leave EU, even though analysts are not expecting it will happen in the short term. So gold and Japanese yen are considered as the safe haven now.
“We have been flagging the upside risks to our views for some time now on the back of stronger-than-expected investor sentiment and flows,” Teves said. “The extent and breadth of the interest has meant that gold positions have more endurance and stability.”