Gold races to 2-year high as investors seek refuge from Brexit

Reuters: Gold soared as much as 8% to its highest in more than two years on Friday after Britain delivered a shock vote to leave the European Union, leaving investors to scurry for protection in the precious metal and other assets perceived as less risky.

In sterling terms, gold delivered double-digit percentage gains to top 1,000 pounds an ounce for the first time in more than three years, while euro-priced gold rose as much as 13%.

Bullion pulled back from early highs however as the dollar, in which it is priced, headed for its biggest daily gain since 1978 against a currency basket, but remained elevated.

Spot gold peaked at $1,358.20 per ounce and was up 4.5% at $1,313 an ounce at 0958 GMT, while US gold futures for August delivery were up $54.80 an ounce at $1,317.50, off an early high of $1,362.60 an ounce.

“It (Brexit) benefits gold because in a general risk-off mode, it’s a natural safe haven for everybody,” said Marie Owens Thomson, Chief Economist at Indosuez Wealth Management in Geneva.

“Now that the UK has voted to leave, we think there’s a higher probability that the $1,350-1,360 per ounce level can be breached, and we’re therefore looking for an extended target in the 1,400s,” she said.

Gold priced in sterling was last at 945.94 pounds an ounce, up almost 13%, having peaked at 1,019.03 pounds overnight. Euro-denominated gold was up 8.4% at 1,182.61 euros an ounce, off a high of 1,244.34 euros.

Spot prices, already boosted by fading expectations for a U.S. rate hike, are now up 25% this year.