Investors are fleeing to safety as the United Kingdom has voted to leave the European Union.
As of 9:15 a.m. ET, gold has soared 5.21% to roughly $1,329 an ounce. The precious metal had dived as low as $1,255 an ounce at 6 p.m. ET on Thursday and soared as much at 7% around 11:50 p.m. ET.
The rally in gold may not be over yet, as analysts expect the desire for safety to continue.
“Brexit has seen a wave of risk aversion and for the US dollar to strengthen versus other currencies,” said Robin Barr, commodities strategist at Societe Generale on Friday.
“We expect the impact on metals to play out via three main channels; increased safe-haven appeal for gold, weakness in the industrial metals sector (UK exit from the EU to lead to a retrenchment in economic growth in Europe, the US and elsewhere) and more generally, a wave of risk aversion across most of the commodity complex.”
“The argument for a gold rally is straightforward,” said James Steel, chief precious metals analyst at HSBC.
“The uncertainty spurred by this vote will likely elicit sufficient gold purchases to buoy prices. The link is the interconnection between gold and wider financial markets.”
Both Steel and Barr projected that gold will climb as high as $1,400 an ounce over the next few weeks.