Asian Fund Managers Turn More Optimistic on Growth but Curb Equity Return Expectations: BofA Survey 
The precious metals sector increased 3.0% in July, the best performing sector over the month, with gold (+2.2%) and silver (+9.3%) both moving higher. Over the year, the sector is up 29.0%, with gold (+26.9%) and silver (+46.4%) up significantly. YTD, precious metals is the best performing commodity sector. Gold prices increased in July as policy uncertainty and concerns about the global economy continued to drive demand for safe-haven assets.
Long gold spot vs short Dec-16 LME copper Gold should rally towards $1400 as the US Fed is unlikely to hike this year after the Brexit vote.
ETF holdings increased in July by 2.8% - the sixth monthly increase this year. YTD total ETF gold holdings are up 37.4% (17.5 million ounces), and are at the highest levels since mid-2013.
Whereas the Copper is likely to underperform on rising supply and the slowdown in China. We look ahead for gold to trade higher towards $1,400/oz near-term.
The heightened market uncertainty due to Brexit would prompt investors to seek safe-haven assets, benefiting gold and the rest of the precious metals. While, arguably, some of this uncertainty has already been priced in, there is likely much more to come.
Brexit would spark significant physical purchases of gold not just in the UK but also from the much larger European market, particularly Germany, which accounts for over half of the total gold retail investment demand in Europe, according to GFMS figures.
Furthermore, the Brexit vote is likely to cause the Fed not to hike this year which would be beneficial for gold. We consider the recent copper rally to be premature given that copper mining output is increasing which is likely to result in a supply surplus this year.
Furthermore, the demand outlook for copper is muted partly because of slowing infrastructure spending growth in China. We forecast the LME copper price to trade down to about $4300 before year-end.
