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PRECIOUS-Gold extends gains as Brexit aftermath spurs safe-haven draw

Published 2016-06-26, 11:24 p/m
© Reuters.  PRECIOUS-Gold extends gains as Brexit aftermath spurs safe-haven draw
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* Gold rose the most since 2009 on Friday after Brexit
* May push towards $1,400 in next 1-2 weeks - ANZ
* Silver slips after marking 1-1/2 year high

(Recasts, changes dateline to Bengaluru, adds comment and
updates prices)
By Vijaykumar Vedala
BENGALURU, June 27 (Reuters) - Gold climbed on Monday,
trading near a more than two-year peak reached in the previous
session, as investors sought refuge in the safe-haven amid
economic and political uncertainty after Britain voted to exit
the European Union.
Bullion surged 4.8 percent on Friday, its biggest single-day
gain since January 2009, as the British exit, or Brexit, forced
a selloff in risky assets from industrial commodities to stocks
and sterling. The pound and Asian stocks continued to reel on
Monday. MKTS/GLOB
Prime Minister David Cameron said he would step down after
the vote that dealt the biggest blow since World War Two to the
European project of forging greater unity.
British Finance Minister George Osborne, who had warned
during the campaign that a Brexit would cause financial market
volatility, scheduled a statement for 0600 GMT on Monday to
provide reassurance about "financial and economic stability".
Spot gold XAU= rose as much as 1.5 percent to $1,335.30 an
ounce and was trading at $1,325.80 by 0251 GMT, up 0.8 percent.
The metal rallied as much as 8 percent on Friday to peak at
$1,358.20, the highest since March 2014.
U.S. gold for August delivery GCcv1 was up 0.6 percent at
$1,330.80 an ounce.
"In the next week or two, we think gold could push towards
$1,400," said ANZ commodity strategist Daniel Hynes, adding that
a weak U.S. dollar and a dovish Federal Reserve would also
support bullion.
The referendum verdict likely means the Fed's ambitions for
two rate rises this year have been placed on hold, analysts and
experts say.
Goldman Sachs (NYSE:GS) has raised its gold price forecasts saying
Britain's vote to leave the European Union suggested a more
sustainable impact on the trajectory of U.S. interest rates.

According to Macquarie Research: "Gold price will go higher
in the third quarter as the full ramifications of Brexit begin
to be felt but expect it to fall back in fourth quarter after
the U.S. election and as the Fed gets ready to hike again." It
increased its third-quarter forecast to $1,350.
Holdings in SPDR Gold Trust GLD (NYSE:GLD), the world's largest
gold-backed exchange-traded fund, jumped 2 percent to 934.31
tonnes on Friday, the highest since July 2013. HLDSPDRGT=XAU
Spot silver XAG= slipped 0.2 percent to $17.65 per ounce,
after hitting its highest since January 2015 on Friday.
Platinum XPT= rose 0.9 to $989.21 an ounce and palladium
XPD= was up 0.5 percent at $550.

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