By Suzanne O'Halloran
Great Britain’s surprise vote to bail on the European Union, i.e ‘Brexit’, cost stock investors a record $2 trillion in losses last week, but the event is turning out to be a rainmaker for gold investments, notably the world’s largest gold fund.
The SPDR Gold Trust ETF (GLD), commonly referred to asGLD, raked in $778 million in new assets on Friday, according data provided to FOXBusiness.com by parent company State Street Global Advisors (STT). That’s the strongest day for inflows since early August 2011 when the United States’ credit rating was downgraded from AAA by Standard & Poor’s and the world was dealing with fears of a European sovereign-debt crisis.
In tandem with inflows, the price of gold has seen the largest two day percentage gain, 4.8%, since August 2011 closing at $1,322.50 an ounce on Monday.
The fund commands nearly $38 billion in assets and countsbig money investors as its top shareholders including BlackRock Financial (BLK) and John Paulson’s hedge fund, Paulson & Co.
While the yellow metal is a predictable safe-haven trade in times of uncertainty Brexit may be icing on the cake for gold this year, which is already benefiting from central banks around the world that are bumbling along to stimulate stagnant economies.
Juan Carlos Artigas, Director Investment Research, World Gold Council, describes the environment before Brexit as being "supportive" for gold telling FOXBusiness.com that Brexit "highlights the importance of gold because central banks still need to diversify and there are not as many candidates." He makes note of traditional safe-haven currencies, such as the British Pound, which are being whipsawed.