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PRECIOUS-Gold gains as investors seek refuge after Brexit vote

Published 27/06/2016, 08:33 pm
© Reuters.  PRECIOUS-Gold gains as investors seek refuge after Brexit vote
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* Gold rose the most since 2009 on Friday after Brexit

* Silver up after marking 1-1/2 year high on Friday (Updates throughout, changes dateline from BENGALURU)

By Clara Denina

LONDON, June 27 (Reuters) - Gold rose on Monday, sticking close to a more than two-year peak reached in the previous session, as uncertainty over Britain's vote to leave the European Union forced investors to sell equities and seek safer assets.

Bullion surged 4.8 percent on Friday, its biggest single-day gain since January 2009, as the British vote forced a selloff in risky assets from industrial commodities to stocks and sterling.

Gold is often perceived as a hedge against economic and financial risk.

Spot gold XAU= rose as much as 1.5 percent to a session high of $1,335.30 an ounce and was up 0.8 percent at $1,325.46 by 0959 GMT. It rallied 8 percent to $1,358.20, the highest since March 2014, at one stage on Friday.

Gold denominated in sterling XAUGBP=R rose to its highest since April 2013 on Friday, as the currency fell to its lowest in 31 years. MKTS/GLOB

"The uncertainty around the timing of negotiations to leave the EU means that not only do investors become more defensive and buy things like gold and the dollar, but it also keeps sterling under pressure and translates into a permanent loss of economic activity at domestic level," ETF Securities analyst Martin Arnold said.

The British referendum verdict probably means the Fed's ambitions for two rate rises this year have been placed on hold, analysts and experts said. Sachs has raised its gold price forecasts saying Brexit suggested a more sustainable impact on the trajectory of U.S. interest rates. is sensitive to interest rates changes, with increases mostly signalling a rise in the opportunity cost of holding the non-interest yielding metal.

"Gold price will go higher in the third quarter as the full ramifications of Brexit begin to be felt but expect it to fall back in fourth quarter after the U.S. election and as the Fed gets ready to hike again," Macquarie said.

Holdings in SPDR Gold Trust GLD (NYSE:GLD), the world's largest gold-backed exchange-traded fund, jumped 2 percent to 934.31 tonnes on Friday, the highest since July 2013. HLDSPDRGT=XAU

China's gold imports via main conduit Hong Kong rose nearly 68 percent in May to the highest since December, data showed on Monday. silver XAG= rose 0.2 percent to $17.70 an ounce, after hitting its highest since January 2015 on Friday.

Platinum XPT= rose 0.8 percent to $989 an ounce and palladium XPD= was down 0.6 percent at $546.

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