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Gold has risen for several sessions already and currently trades at over $1,300 an ounce. Usually, MarketWatch reports, gold and dollar trade in the opposite directions- as one rises, the other falls. This time, however, it’s different. This is due to the British vote to exit the European Union.
Once the UK government officially declares its country’s desire to leave the EU, volatility is likely to increase. It is quite possible that the Brits will not get the same access to the common market if they’ll seek to limit the free movement of people. In fact, many Brits voted to leave because they feel that there are too many East Europeans working in their country, even though there are hundreds of thousands of British citizens working and living abroad.
Brexit vote has also triggered new calls for a Scottish independence referendum. It is quite likely that Scotland will leave the United Kingdom, possibly dealing a great blow to the British Pound.
In times of uncertainty, gold has acted as a storage of value and a hedge against inflation, so no wonder the yellow metal shines again as investors seek safe havens in times of turmoil.
Investors can acquire stakes in gold by buying it outright, investing in multiple Exchange-Traded Funds, or even selecting gold mining stocks. As Brexit nears and negotiations with remaining 27 EU states start, risk appetite will quite possibly stay low.