* Gold priced in sterling hits over 3-year high
* U.S. Fed June FOMC meeting minutes due Wednesday
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices)
By Jan Harvey
LONDON, July 6 (Reuters) - Gold hit its highest in more than two years on Wednesday as a drop in stock markets and a slide in some bond yields to record lows after Britain's vote to leave the European Union prompted investors to seek out bullion as a haven from risk.
European equities fell and Germany's 10-year bond yield slid to a record low for a second day on Wednesday, as fears about the impact of Brexit on economic growth gripped global markets and underpinned demand for safe-haven bonds.
Spot gold XAU= was up 1.1 percent at $1,370.80 an ounce at 1145 GMT, while U.S. gold futures GCv1 for August delivery were up $15.30 an ounce at $1,374.00.
"Panic is back in the market -- you can see that not only in gold, but also with stock markets," LBBW analyst Thorsten Proettel said. "Right now, everyone is looking for a strategy from London."
As well as investors shaken by stock market volatility fleeing to the safety of gold, the drop in bond yields has cut the opportunity cost of holding bullion.
Yields on U.S. Treasuries, the benchmark for bonds worldwide, hit record lows out to 30 years on Tuesday. US/
"Bonds are in negative territory now, and big investors are looking for any possibility of avoiding negative interest rates," Proettel said. "So gold may become more interesting for them."
The world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , posted the biggest one-day surge in its holdings in more than six years on Tuesday. They jumped 28.8 tonnes to 982.72 tonnes, their highest since June 2013. GOL/ETF
Gold's move higher came in the teeth of a stronger dollar, as has happened before in periods of elevated risk aversion. The pound dropped to a fresh 31-year low against the dollar. FRX/
Gold priced in sterling XAUGBP=R rose to its highest in over three years, touching a high of 1,069.36 pounds an ounce.
Investors will also be watching for clues on U.S. Federal Reserve interest rate policy from minutes of its June 14-15 meeting later in the day, after New York Fed President William Dudley said the bank can be patient on raising rates. continue to expect U.S. real rates to fall from here and ultimately for equilibrium real rates to settle lower and have limited upside," UBS said in a note. "These factors justify strategic gold allocations across different types of investors."
Among other precious metals, silver XAG= was up 1.5 percent at $20.19 an ounce, while platinum XPT= was down 0.9 percent at $1,061.99 an ounce and palladium XPD= was down 0.6 percent at $594.60 an ounce.
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