It’s a Brexit! UK Votes to Leave EU

The British Pound dropped to a 21 year low this morning as new emerged that the British public have voted to leave the European Union in a landmark referendum.

In the run up to the referendum it seemed the remain campaign were showing a comfortable lead, with even UK bookmakers offering odds of 1/8 on a Remain victory in the final few hours. However, with just a few votes left to count, a Leave victory has been announced with the margins set at 52% – 48% in favour of leave.

With global Indices all falling (Japan’s Nikkei 225 plummeted nearly 8%), the British Pound has slumped to its lowest level since 1985. In Cable the GBP/USD was down 7.92%, whilst the GBP/EUR pairing was down 5.29% as investors fled Sterling into the warm safe haven of precious metals. Meanwhile, the Euro dropped more than 3% against the US Dollar, the largest single decline for the Euro since its inception.

Safe Haven Precious Metals

As worldwide stocks dropped and the Euro and Sterling suffered heavy falls, investors found a safe haven in Gold and Silver. Gold shot up 4.47% with a troy ounce trading at $1319.70, whilst Silver jumped 2%, with a troy ounce valued at $17.695. Gold benefited from Brexit, as investors worried that it could push Europe back into a recession, adding more pressure on the already fragile global economy. Such a recession could curb demands for raw materials like oil and copper, dragging down commodity prices again just as many were finding themselves back in favor in recent weeks.