Further supporting the gold outlook, swaps traders are pricing in a lower chance of a Federal Reserve interest rate hike, betting on a 50% likelihood of a hike, compared to 82% on Tuesday.
Meanwhile, uncertainty in Europe can also fuel demand in the region. Market observers are calling for a so-called hard Brexit. Elections in Italy, France, Germany and Holland could also see an increase in anti-establishment and populist parties.
“In our view, the intense political uncertainty that advanced economies now face, combined with the unknown aftermath of years of unconventional monetary policies (quantitative easing, zero and now negative interest rates) will make gold particularly valuable to investors in the coming years,” according to the World Gold Council.
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