Three Charts Show How Precious Brexit Is for Gold and Silver

  • The metals have outperformed major assets since June 23 vote
  • Gains are even larger for U.K. investors after pound’s slump

Gold and silver have been the standout winners in the fallout from Britain’s decision to ditch the European Union.

Investors seeking a haven from volatile currencies and equities pushed prices of the metals to a two-year high. With central banks pledging more stimulus to prop up markets (the Bank of England may cut interest rates within months and traders have reduced odds on the Federal Reserve raising rates), the appeal of owning non-yielding assets like precious metals has increased.

Gold has climbed 6.2 percent and silver 11 percent since the June 23 referendum, outperforming global stocks, bonds and currencies, including those also often bought as a haven.

“Macroeconomic risk and geopolitical risk were already setting gold and silver up for a good year - the Brexit fall out has just been the icing on the cake,” said Mark O’Byrne, a director at brokerage GoldCore Ltd. in Dublin. “These metals will continue to outperform as market conditions remain unstable.”

As the pound tumbled to a three-decade low against the dollar, bullion became even more valuable for U.K. investors. Priced in sterling, silver has surged 23 percent since the vote, heading for the biggest gain over six days since at least 2000. Gold has climbed 19 percent denominated in pounds in the period.

Purchases of physical metal have accelerated. Gold holdings in exchange-traded products gained 1.6 percent so far this week, the most since early May, to the highest since 2013, data compiled by Bloomberg show. Silver holdings are near a record.

Britain’s Royal Mint said online trading in one of its products almost tripled from a week earlier, while other dealers have also reported a surge in activity.

— With assistance by Anchalee Worrachate

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