* Gold priced in sterling hits over 3-year high
* U.S. Fed June FOMC meeting minutes due Wednesday
(Adds comments, updates prices)
By Sethuraman N R and Vijaykumar Vedala
BENGALURU, July 6 (Reuters) - Gold rose to its highest in
more than two years on Wednesday, as investors piled back into
the safe-haven asset after the benchmark U.S. government bond
yields hit all-time lows amid renewed market jitters over
Britain's decision to leave the European Union.
Asian share markets turned tail as fears over instability in
the European Union returned with a vengeance, sending the pound
to three-decade lows and hammering risky assets of all stripes.
MKTS/GLOB USD/
Yields on U.S. Treasuries, the benchmark for bonds
worldwide, hit record lows out to 30 years on Tuesday. US/
Spot gold XAU= touched its highest since March 2014 at
$1,371.40, and was trading up 0.8 percent at $1,366.86 an ounce
by 0658 GMT. It surpassed the $1,358.20 mark hit on June 24 in
the immediate aftermath of the Brexit vote.
U.S. gold GCcv1 was up 0.8 percent at $1,369.60.
Gold priced in sterling XAUGBP=R rose to its highest in
over 3 years, touching a high of 1,069.36 pounds an ounce.
"No one is able to understand how much risk is yet to be
unravelled (from Brexit). That is an uncertainty that no one
likes. This is what is driving gold prices higher," said Helen
Lau, an analyst at Argonaut Securities in Hong Kong.
The Bank of England took steps on Tuesday to ensure British
banks keep lending as the financial consequences of the decision
to leave the EU began to materialise.
Gold is often favoured as a hedge against economic and
financial uncertainty.
"Additional gains (in prices) may be tough going. Longs may
take the opportunity to take profits and any relaxation in risk
may undermine prices," HSBC analyst James Steel said in a note.
Further boosting gold, were comments from New York Federal
Reserve President William Dudley, who said that the central bank
can be patient on raising interest rates due to low inflation
and uncertainties over U.S. economic prospects.
Investors will be watching out for signs on the U.S. Federal
Reserve's thinking on rates from minutes of its June 14-15
meeting due later in the day.
UBS raised its gold price forecasts from 2016 through 2020,
saying the bullion had likely entered the early stages of the
next bull-run.
Holdings in SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, increased 3.02 percent to
982.72 tonnes on Tuesday, the highest since June 2013. GOL/ETF
Spot silver's XAG= rally hit a bump on Tuesday as the
metal fell 2 percent, its biggest single-day loss in about three
weeks. It was up 1.6 percent at $20.23 on Wednesday.
Among other precious metals, platinum XPT= , which was
trading at two-month highs, was down 0.5 percent at $1,067 an
ounce.
Palladium XPD= was up 0.5 percent at $600.73.