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Gold declined on signs that policy makers will seek to minimize the impact on global growth from the U.K.’s decision to leave the European Union, increasing appetite for risk.

Bullion for immediate delivery fell as much as 0.4 percent to $1,314.08 an ounce and traded at $1,316.44 by 1:36 p.m. in Singapore, according to Bloomberg generic pricing. The metal jumped to the highest in more than two years on June 24 after the Brexit vote, and is set for a second quarterly gain.

Gold has rallied 24 percent in 2016 as demand for haven assets surged and traders factored in bets that the Federal Reserve won’t raise interest rates this year. Asian shares increased for a second day following the steepest two-day advance in global stocks since August as central banks around the world signaled a readiness to act if required.

“Markets are breathing a sigh of ‘brelief’ today, with risk assets recovering the majority of the losses that last week’s shock referendum result caused,” Jordan Eliseo, Sydney-based chief economist at trader Australian Bullion Co., said by e-mail. “It’s no surprise to see the gold price take a breather in this environment, with the metal still up over $50 in the last week alone.”

"The general feeling is that the U.S. Federal Reserve might not be in a rush to increase interest rates in the coming months."

Credit Suisse on Wednesday raised its short-term and long-term price forecasts for gold and silver, citing prolonged macro and political uncertainty following the Brexit vote.

"We forecast the gold price to increase through 2016 and believe the $1,500/oz mark could be tested by late 2016 or early 2017 as the macro implications of the Brexit vote are clarified, and the Nov. 8 U.S. election weighs on sentiment," the bank said.

The surge in prices after the Brexit vote will deal a further blow to demand in India, the second-largest consumer, and may cut imports to the lowest in seven years, according to Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation. Purchases from overseas are seen slumping to about 700 metric tons this year, he said. That’s a 23 percent drop from 2015, data from the World Gold Council show.

Global investor demand remains strong. Holdings in gold-backed exchange-traded funds rose 7.6 tons to 1,947.9 tons as of Wednesday, the highest level since September 2013, data compiled by Bloomberg show. Investors have added 185.6 tons to ETFs this quarter.

Reference: Bloomberg, Reuters