Gold hits fresh two-year high as UBS declares the start of new bull run

Image: Screenshot of OneCoin event in Dubai, 2015 via YouTube.

Gold prices continue to climb and have now “entered a new phase” of growth in the post-Brexit world thanks to a mix of macroeconomic factors, according to analysts at UBS Group AG.

The yellow metal rose Wednesday for a sixth consecutive day in London, reaching a fresh two-year high on Wednesday at $1,376.20 an ounce and it is likely to reach $1,400 shortly, UBS strategist Joni Teves said in a note quoted by Barron’s.

The expert, who argues that the precious metal is at the early stages of the next bull-run, says prices will settle in the second half of this year, averaging $1,340 an ounce.

Gold hits fresh two-year high as UBS declares the start of new bull run

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Teves also says the UK’s vote to leave the EU has reinforced the risks facing the global economy, boosted uncertainty, and fuelled worries about the effectiveness of unconventional monetary policies. All of these factors combined, he notes, create an environment where gold is an extremely attractive investment:

Gold’s performance has been driven by very broad-based participation in gold as a portfolio diversifier and hedge. Our sense is that individual positions are not particularly large, but rather the extent of involvement has been quite expansive. It’s also worth noting that despite the very strong inflows into gold ETFs YTD, global holdings are still some distance away from record highs.

Gold prices have risen around 9% since the Brexit win on June 23 and are up 24% so far this year.

Silver prices are also seeing solid gains today, after hitting a two-year high on Tuesday. September Comex silver was last up $0.383 at $20.28 an ounce.

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