Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged 4.7% to finish above $1,322, its highest close in two years, as Britain's vote to exit the European Union caught investors by surprise and sent global markets into turmoil, turbocharging demand for safe-haven assets.

In a day of furious trading reminiscent of the Lehman Brothers collapse in 2008, the metal jumped nearly $100 in mid-session and notched its biggest one-day gain since September 2013. It finished the week up 2.1%.

Global equity markets lost around $2 trillion in value, with the Dow dropping 3.2% and the Global Dow nearly 5.5%, as uncertainty about the fate of the euro, EU, and global recovery gripped the markets.

Forex markets were also deeply shaken. The UK pound suffered its biggest daily drop ever, falling 8% to a 31-year low against the dollar. The euro and yen plunged 2.3% and 3.2%, respectively, while the ICE Dollar Index rose 2.3% on safe-haven inflows.

Central banks around the world, include the Federal Reserve, have pledged to increase liquidity as needed in order to calm the Brexit storm. Rising liquidity is supportive of higher gold prices because it devalues currencies and builds demand for alternative stores of value.

Many analysts now view the Fed's plans to raise interest rates as indefinitely off the table. Research released today by the Fed show a strong link between long-term rate policies in the U.S. and other developed economies, suggesting that the Fed may be forced to keep rates near zero until growth resumes in the Eurozone, something that the Brexit is likely to delay.

The other precious metals were mixed on the day and higher for the week. Silver rose 2.5% for a weekly gain of 2.2%. Platinum added 2.2% for the day and week. Palladium fell 3.4% today but still gained 3.2% this week.

At the Comex close: August gold surged $59.30 to $1,322.40; July silver jumped 44 cents to $17.79; July platinum picked up $20.80 to $987.10; and September palladium lost $19.45 to $546.45 an ounce.