Gold price soars as gold miners rocket ahead of potential Brexit

Local shares have taken a belting today based on signs that Britain may leave the European Union.

Leave is now considered the most likely outcome from the Brexit vote, sparking fear and uncertainty in markets around the world. Currencies are experiencing severe fluctuation, as are global equity markets, but one asset that is benefiting is gold.

Gold shares are amongst the few that are actually rising on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) today. While the broader market has plunged 2.8% or 149 points, Newcrest Mining Limited (ASX: NCM), EVOLUTION FPO (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) have all risen between 2.2% and 4.6%.

Beadell Resources Ltd (ASX: BDR) has also gained 8.2%, while Silver Lake Resources Ltd (ASX: SLR) and St Barbara Ltd (ASX: SBM) are up 6.6% and 2.5%, respectively.

These strong gains have been caused by a lift in the price of gold itself. This is because during times of uncertainty, investors typically turn to the shiny metal as a safe haven. It is unclear what a Brexit would mean for the European and global economies, hence investors are turning to gold in droves.

Of course, a Remain outcome is still possible, but is looking unlikely at the moment. Investors should expect more volatility in the coming hours – and perhaps days – as the market adjusts to the outcome.

Remember though: while volatility may be scary in the near term, it has the potential to create some fantastic buying opportunities. Try to keep your emotions in check, and remain on the lookout for some heavy discounts across the market.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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