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Post-Brexit global equity loss spells good news for gold.

In the wake of the U.K. vote on Thursday to exit the European Union HSBC looks to gold to challenge $1,400 an ounce.

Global markets skidded following the unexpected result in which Britons voted to withdraw from the EU by a 52 percent to 48 percent margin.

James Steel, chief precious-metals analyst with HSBC said “We anticipate a sizable ‘safe-haven’ inspired trade in gold following the U.K.’s vote to leave the EU and gold prices to rally significantly to reach $1,400/oz,”

As New York trading was beginning, the Comex August gold contract rose as high as $1,362.60 an ounce, before correcting back to $1,326.90 as of 8:12 a.m. EDT, still up $63.80, or 5%, for the day.

Steel goes on to say “In periods of uncertainty, gold is often one of the few perceived ‘safe-haven’ assets with liquidity. It is also historically negatively correlated with risk-on assets.”

HSBC’s forex team expects for the British pound to fall to $1.25 by the end of the third quarter and the euro weakening to $1.10 by year-end. The pound – which is already at a three-decade low – was last predicted at $1.3706 after an overnight high of $1.5006, and the euro was down to $1.10633 after an overnight high of $1.14242.

A rival measure of global stocks, the MSCI all-country world index .MIWD00000PUS, fell 4.76 percent on Friday, it’s the largest percentage loss since Aug. 8, 2011, when it fell 5.09 percent on the first trading day after S&P stripped the United States of its “AAA” credit rating.

As a result of this gold could be a new home for the flow of some of these funds that are seeking a new destination.

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