By Stephanie Yang and Ed Ballard
Gold prices rose on Wednesday as continued concerns over Britain leaving the European Union sent investors into the safe-haven metal.
Gold for August delivery was recently up 0.4% at $1,323.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
Britain’s decision to leave the EU sent gold soaring on Friday, with the precious metal trading as high as $1,362 a troy ounce in the hours after the vote. Uncertainty over the economic and political consequences of a Brexit has increased demand for safe haven assets such as gold.
“Obviously with Brexit there is a big fear trade going on,” said Nitesh Shah, a commodities strategist at ETF Securities. “There are a lot of lingering questions that won’t be answered for a long time.”
Economic fallout following a Brexit may also keep the Federal Reserve from raising interest rates, which could provide more support for gold prices. Higher rates tend to weigh on gold, since the metal pays its holders nothing and struggles to compete with yield-bearing assets when borrowing costs rise.
Bob Haberkorn, senior market strategist at RJO Futures, said the combination of a Brexit and low interest rates is leading more investors to buy and hold gold, rather than actively trade.