Last Friday’s record surge in gold prices, which saw it zoom by about 8% to cross US$ 1,350 per oz, levels last seen in mid 2014, before closing lower, continued, though at a slower rate at the start of the current trading week. The yellow metal was quoting at US$ 1,325 per oz during the day, up nearly 5% during trading hours.

Analysts expect that the boost to prices provided by gold’s safe haven properties is likely to drive prices upwards over the next few days, and even if there are temporary retreats on profit booking, a return to the levels of US$ 1,250 or so, seen a couple of weeks ago, is unlikely in the short term.

World Gold Council said in a statement on Friday, “Gold is fulfilling its classic role as a safe haven asset and performing exactly as the many investors that bought it in the run up to the referendum will have hoped. We expect to see strong and sustained inflows into the gold market driven by the intense market uncertainty that now faces the global markets.”

WGC has forecast that Gold ETF holdings and purchases of gold coins by small retail investors, both of which have shot up in the recent past, are likely to accelerate further in the current scenario. It also said that there could be an increase in central bank purchases of the yellow metal.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, saw its stocks rise by 2% on Friday to 934.31 tonnes, the highest since July 2013.

In India, the metal crossed the Rs 31,000 per 10 gms mark and is now likely to move higher on global uncertainities and stronger domestic demand on the back of a good monsoon. While most observers predict that the metal may reach around the Rs 32,500 mark, a few believe that it could even soar higher to Rs 33,500 per 10 gms before the year end.

Unlike many other economic and political events that have trigerred shorter term hikes in gold prices, the Brexit impact is likely to be seen over a longer term. Legally, there is a two year deadline for the exit, but in the meantime, other related issues could heighten the current instability, observers said. Some of the examples they point to are the possibility of referendums from smaller countries like Scotland who had voted against the exit, or the fact that other countries in the EU may now find themselves faced with similar demands for a public referendum.