In the event of BREXIT, the blokes from HSBC are calling for a 10% storm trooping rally in gold. Like me, they believe gold should be placed on the ark, as a safe haven asset.
If, by chance, England votes to remain a slave to Brussels, they’re not really expecting more than a 5% drop. As a matter of fact, they don’t really think there is a scenario that might stop gold from ripping off heads to the upside.
Gold has historically traded as a safe haven asset and, as such, is likely to react to the results of the 23 June UK referendum on EU membership. We look at two possible scenarios, one in which the UK votes to leave and one in which the UK votes to remain in the EU, and their potential impact on gold. Scenario one, a vote to leave, could result in as much as a 10% rally in gold prices, to cUSD1,400/oz, we believe. The drive higher may be more pronounced if there were to be broader concerns about the future direction of the EU after the vote. Gold could also benefit from the reluctance of investors to move into the GBP or even the EUR. Under scenario two, a vote to remain in the EU, we believe gold is likely to fall by no more than 5%, or to USD1,220/oz, as other bullish factors are likely to support prices.
It’s a win-win situation. Can’t fucking lose.
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That is a truly worthless prediction. Basically betting markets are showing 2:1 for leave vs stay. Which is exactly equal to 10:5 for their gold return predictions for leave vs stay. Bottom line – they know nothing…. And will probably even be wrong in either case.