By Myra P. Saefong and Rachel Koning Beals
Gold futures climbed toward a two-year high Wednesday, and silver rallied by nearly 3% as the precious metals gained momentum on the back of a weaker U.S. dollar.
Global markets continued to sort out risks tied to the U.K.’s plan to split from the European Union. “It is not all risk-on today…because the yellow metal is shining again as smart money is wary of current [riskier-asset] gains,” said Naeem Aslam, chief market analyst at ThinkForex.
August gold GCQ6, -0.34% gained $9, or 0.7%, to settle at $1,326.90 an ounce. Prices, returned to their best settlement level since July 11, 2014.
Gold futures trade around 0.3% higher for the week. Year to date, futures are up more than 25%.
Among the exchange-traded funds, the SPDR Gold Trust GLD, +0.41% gained 1% as of gold’s settlement. The VanEck Vectors Gold Miners ETF GDX, +2.07% rose 3.5%.
“[As] soon the Article 50 [EU leave rule] is triggered, it will be official that the U.K. is out [of the European Union] and it may push volatility higher,” Aslam said. “The increase in the volatility could support the gold price further and the negotiation process between the U.K. and the EU will be full with turbulence.”
The rally for silver Wednesday was more impressive than gold’s. The September contract SIU6, +0.61% gained 51.8 cents, or 2.9%, at $18.407 an ounce, with prices at their highest since mid-September of 2014.
“Silver is like gold on steroids when it gets going due to the very small size of the physical silver market versus stock, bond and even the gold market,” said Mark O’Byrne, research director at GoldCore, based in Dublin. “Silver looks very bullish now and our clients are allocating to it in a big way.”