ARE YOU A GOLD DIGGER? Participants searching for gold nuggets from buckets of sand during the International Championships in Gold Panning in Zlotoryja, Poland. Every year, with the arrival of warm weather, gold diggers from around the globe converge on the Kaczawa river in Poland's gold rush capital Zlotoryja to try their luck at panning, the process of washing gravel in a pan to separate out precious metals.
London - Prices of precious metal up at near two-year high
Published: Sat 18 Jun 2016, 3:47 PM
Last updated: Sat 18 Jun 2016, 9:08 PM
Gold prices hit a near two-year peak last week as investors sought the haven commodity on fresh fears Britain would vote to leave the European Union in a looming referendum.
The precious metal, whose twin drivers are investment buying and jewellery demand, surged on Thursday to $1,315.71 an ounce, which was the highest since August 2014.
The commodity soared as new polls showed a rise in support for Brexit ahead of this week's referendum, adding to concerns over the global economic outlook.
With the EU referendum outcome too close to call, investors piled into safe haven investments, notably gold, the yen and German government bonds, seeking financial protection in case Britons vote to leave.
For the first time in history on Tuesday, investors accepted negative returns for the privilege of owning rock-solid German government 10-year bonds, known as Bunds.
Meanwhile, the Bank of Japan, the Bank of England and the US Federal Reserve all kept interest rates unchanged this week-- but all three institutions cited the British referendum as a source of global unease.
"The current high level of risk aversion among market participants, as evidenced for example in falling stock markets and a firmer US dollar, is continuing to drive up the gold price," wrote Commerzbank analysts.
"No doubt it is also profiting from the low interest rate environment," they added.
The Fed also lowered its economic growth and interest rate projections over the next few years, while the BoJ decision to hang fire despite the weak economy has added to uncertainty.
But then markets were shaken on Thursday by the tragic murder of a pro-Europe lawmaker in Britain, with some traders signalling it could swing the upcoming referendum vote to remain in the EU.
Britain's bitter voting campaign was on pause on Friday for a second day as the nation reeled from the death of Labour MP Jo Cox, a 41-year-old former aid worker.
"The tragic murder of Jo Cox, a Labour member of the UK parliament and a 'Remain' supporter, helped trigger a strong market reversal led by a weaker dollar," said Saxo Bank analyst Ole Hansen.
Gold retreated on Friday to stand at $1,287.58 an ounce, but still remained in positive territory for the week.
"For an extended period, gold prices have been dictated by Brexit expectations," noted FXTM analyst Lukman Otunuga. "The suspension of the Brexit campaign bolstered speculations of a 'Bremain' victory."
By Friday on the London Bullion Market, the price of gold stood at $1,290.70 an ounce from $1,275.50 a week earlier.
Silver advanced to $17.37 an ounce from $17.32.
On the London Platinum and Palladium Market, platinum decreased to $968 an ounce from $996. Palladium dipped to $531 an ounce from $554.
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