SINGAPORE – Gold climbed for a fifth week and silver surged to the highest price since September 2014 as investors speculated that central banks will need to continue supporting the global economy in the wake of Britain’s vote to quit the European Union.
Gold added 0.8% to $1 332.62/oz at 3:20 pm in Singapore, according to Bloomberg generic pricing, as the metal in the UK currency rallied back above £1 000/oz. Silver jumped as much as 3.6% to $19.396/oz and traded at $19.2405. Prices have soared 8.4% this week, the most in nearly three years.
Haven assets are in demand on expectations that policy makers will do more to support growth. Governor Mark Carney said Thursday that the Bank Of England could cut interest rates within months as it tries to shield the UK economy. Prospects for further US rate increases have been wound back since the Brexit vote, while investors continue to pile into exchange-traded funds backed by gold, boosting the assets to the highest since 2013.
“There are risks that policy makers will now have to consider further easing to help limit the fallout from Brexit,” Zhan Dapeng, an analyst at Everbright Futures, said in a note. “Gold could climb further as more investors allocate money into it.”
Assets in gold-backed exchange-traded funds have increased 34% to 1 952.5 metric tons this year as of Thursday, data compiled by Bloomberg show. Gold will probably extend gains as chances of a Fed hike have “decreased tremendously,” said Ivan Szpakowski, who left Citigroup earlier this year to set up hedge fund Academia Capital LLC.