Accommodative monetary policies favor gold as well as equities because low interest rates encourage investors to opt for assets that do not rely on interest yields.
"Gold prices can continue to benefit from an uncertain economic picture for the UK and Europe after the Brexit vote and also from any quantitative easing, which also means low interest rates," Natixis analyst Bernard Dahdah said.
"Gold thrives in an environment of negative rates, low government bond yields ... obviously the unknown is the probability of a Fed rate increase, which could however not happen this year, helping the metal's price ascent," Societe Generale analyst Robin Bhar said.
Safe-haven assets such as U.S. Treasuries, gold, and the Japanese yen rebounded after falling Tuesday. Benchmark10-year Treasury yields were last at 1.473 percent after hitting a 1-1/2-week high of 1.531 percent on Tuesday as higher yields attracted buyers.
Reference: Reuters, Investing
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