Brexit and a 40% rise in the price of gold.

What an extraordinary week! Where to start..

Well, gold started the year at $1,060/oz and is trading today at $1,336/oz. Priced in GBP(£) the price has gone from £720/oz to £1,007/oz, which is just shy of an extraordinary 40% increase in the price of gold since the beginning of this year. This is as much about currency weakness as it is strength in the gold market.

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As the outcome of the EU referendum started to unfold, the immediate reaction in the gold market came with a rapid 5% jump, but the bigger move was in the Sterling/Dollar price, with Sterling losing 8% against the dollar. Gold proving its safe haven status.

So, what does the future hold?

Continued political instability looks like its on the cards. It seems that we are seeing the rise of populism or direct democracy, with talk of of referendums in many EU countries.

Brexit is one thing, but the Euro is the 800 lb gorilla that might be causing the jitters behind the drop in Deutsche bank’s share price. In a post Brexit world it feels quite inevitable that a political party will be elected with a mandate to have a referendum on Euro membership.