On Tuesday, gold and silver traded higher during European trade, staying close to yesterday’s two-year highs amid surging hopes that major banks of the world are going to step up monetary stimulus in the nearer future in order to withstand the negative economic shock from Brexit.
The UK’s decision to leave the European Union has powered the urgency for major banks around the globe to ease monetary policy.
The Bank of England has just indicated it could get down to stimulus measures for the purpose of supporting the national economy in the nearer months. Besides this, a great number of investors expect the ECB, BOJ and PBOC to further expand their monetary easing.
Hopes for monetary stimulus tend to benefit gold because the number one precious metal is traditionally considered to be a safe store of value as well as inflation hedge.
Meanwhile, market participants are betting too that the Fed would hold off on lifting interest rates in 2016, instead of doing this twice as statesmen had projected.