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Economy

Min Lan Tan -- Gold shines bright, but for how long?

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Gold bullion is displayed at a precious metal dealer in London, Britain.   © Reuters

British voters stunned the world with their June 23 decision to leave the European Union. Shockwaves quickly rippled through markets worldwide, clipping $2 trillion from global share markets on the first day of post-Brexit trading. While global equity markets have since zigzagged from strength to weakness, the momentum of safe-haven assets, like gold, which soared to a 27-month high following the referendum result, and U.S. Treasuries, continues to surge.

The political and economic situation is still extremely fragile in the U.K., particularly amid ongoing government shuffling. Overall stability in Europe will undoubtedly fluctuate as Brexit negotiations commence in the coming months, and other national elections draw nearer. The depth of these concerns helps to explain the performance of "insurance" assets.

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