The U.K. voted to exit the European Union (EU) two weeks ago. Massive market volatility followed…
Volatility and uncertainty are friends to gold. They helped the metal win big after Britain’s decision.
Gold soared 4.7% on June 24. And history says this big jump could help push gold 12% higher over the next year.
[ad#Google Adsense 336×280-IA]Let me explain…
Fear spiked after Britain voted to leave the EU. No one knows exactly what to make of the U.K.’s decision.
Uncertainty like this leads investors to buy safe-haven assets… like gold.
And as expected, gold soared 4.7% after the decision.
That was the biggest one-day move higher for gold since 2009.
We’ve only seen 4.7%-plus daily gains nine other times going back to 1990.
That makes this recent move a rare extreme.
Importantly, history shows that these large one-day gains tend to be the beginning of larger, long-term moves higher.
The table below shows the average returns from similar extremes going back to 1990. Take a look…
These extremes led to minor outperformance in the short term (three and six months). But over the next year, they turned out to be a great sign for gold prices.
On average, gold returned 11.8% in the year after these extremes. That’s more than double the average one-year gain on gold since 1990.
The recent gain also pushed gold to a two-year high – another positive sign. That helps solidify my belief that gold is back in a major uptrend right now.
We can’t know the future, of course. But the U.K. is causing major uncertainty in the market. And uncertainty is good for gold.
The metal just had its best day since 2009. And history says it’ll likely lead to more gains.
Good investing,
Steve
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Source: Daily Wealth