A UK vote to leave the European Union (“Brexit”) would presumably have a negative impact on global business and investor confidence. This in turn is likely to undermine the prices of industrial commodities and boost demand for safe havens, including gold. However, these effects may not be large or sustained. The UK would probably still be a member of the EU for several more years and those officials currently talking up the risks of a global shock are likely to change their tune once the polls have closed. The wider impact would also depend on the degree of contagion from economic and political problems in the UK to the rest of Europe and on the policy responses, including the prospect of an even longer period of very low global interest rates.
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