We have seen Gold soaring in the opening months of 2016. It’s the best performing major metal this year after silver on the Bloomberg Commodity Index, with holdings in exchange-traded funds jumping 25 percent. With the U.K.’s Brexit vote next month to the U.S. presidential election these all may be factors to lift prices even further by year-end, according to Denmark’s Saxo Bank A/S.
Head of Commodity Strategy Ole Hansen who foresees that the bullion may climb to as much as $1,400 an ounce this year says “We have got several global risks, so when you start adding them up, it could be that additional risks will sway some investors to add exposure to gold or maybe revisit gold”.
Gold Bullion has climbed 20 percent in 2016. U.S. central bankers are now debating as to whether to raise borrowing costs, while we see Japan and Europe press on with negative rates. Now attention is shifting to the June 23 vote in the U.K. that’ll dictate whether the country remains in the European Union.
“The outcome is by no means certain yet,” said Hansen. While the dollar may win out against the euro initially after a vote to leave, this could see what Hansen termed the euro project in question and this may leave gold in a good position.
Also in the U.S., politician Donald Trump has come out as the Republican presidential nominee, and he is likely to have a face off against Hillary Clinton. “We have another political uncertainty later in the year with the presidential election,” said Hansen “So these are all just adding to the reasons why precious metals have become the must-haves.”