Gold hit more than two-year highs on Wednesday as equities fell and some bond yields slid to record lows in the wake of Britain's vote to leave the European Union, prompting investors to buy bullion as a haven from risk.
European equities slid and Germany's 10-year bond yield hit a record low for a second day on Wednesday, as fears about the impact of Brexit on economic growth gripped global markets and underpinned demand for safe-haven bonds.
"I think this run higher is going to continue for a while, as long as expectations for Fed (rate hikes) are not going up, and you have uncertainty over Brexit," ABN Amro analyst Georgette Beoele said.
"Bonds are in negative territory now, and big investors are looking for any possibility of avoiding negative interest rates," LBBW analyst Thorsten Proettel said. "So gold may become more interesting for them."
The gold bull market may be just beginning, UBS told clients on Wednesday, listing a plethora of reasons for them to buy the shiny metal.
"An environment of low and negative rates narrows the gap between holding gold vs other assets, making having gold in a portfolio an attractive proposition amid heightened global macro uncertainty," UBS strategist Joni Teves wrote in a research note.
Reference: CNBC
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