By Luzi-Ann Javier
The fallout from the Brexit vote will mean even more gains for gold, which already surged to a two-year high on Friday as the world grappled with the economic impact of the U.K.’s exit from the European Union.
Prices could reach as high as $1,424 an ounce by the end of the year, according to the median of 12 forecasts in a Bloomberg survey of analysts and traders from New York to London conducted on Friday. That would be the highest since August 2013 and a gain of more than 7 percent from where the metal is trading now. Estimates in the survey ranged from $1,375 to $1,600.
Before the U.K.’s vote on Thursday, central bankers had been sounding the alarm that an exit from the EU could be disruptive to the global economy. Federal Reserve Chair Janet Yellen cited Brexit “consequences” as among the factors that went into the decision to keep interest rates unchanged at a policy meeting this month. Traders are now pricing in a 1.9 percent chance that borrowing costs will rise through November. Low rates are a boon to gold because it increases the metal’s appeal as a store of value.
Gold futures for August delivery rose 4.7 percent to settle at $1,322.40 Friday on the Comex in New York, after rising as much as 7.9 percent to $1,362.60, the highest since March 2014.
Here are comments on gold’s outlook compiled through the survey and analyst notes:
* “The Brexit-referendum lowered the probability for an interest-rate hike in the U.S.,” said Thorsten Proettel, a commodity analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany, who raised his gold forecast for the third quarter to $1,350 from $1,300 after the results of the referendum. “Without that burden, the price of gold has...