Over the last two trading sessions, we’ve seen the global community lose more than $2 trillion of value over the UK vote to leave the European Union. The news set off a firestorm of fear. The Dow Jones Industrial Average plummeted 800 points. The British pound fell to a 30-year low. Gold surged as expected.
In fact, as we argued in a June 13, 2016 Profit Alert Daily, gold could hit $1,400 an ounce. “Gold prices could resume the bullish run we saw earlier this year, as expectations for a Federal Reserve interest rate hike fall to the wayside, and as fears of a UK exit from the European Union fuel the risk aversion trade,” we said. Since then, the price of gold has rocketed from a low of $1,282 to a high of $1,328..
With heavy uncertainty and fear around the stability of Europe, news that more countries are thinking of leaving the EU, and the Federal Reserve unlikely to raise rates at all tis year, many analysts have revised their gold price estimates even higher. The immediate aftermath of the UK vote continues to be a positive for gold prices.