Inflows into gold exchange-traded products have been more than $1bn (€900m) since the UK voted to leave the European Union on June 23 as global assets invested in ETFs/ETPs reached a new record in the first half of this year.

Martin Arnold, director of FX and macro strategist at European issuer ETF Securities, said in a note that gold flows have topped $1bn since the EU referendum as investors position portfolios defensively due to continuing uncertainty.

“Inflows into gold ETPs reached the highest level in nearly five months,” added Arnold. “The gold price remains supported by low real bond yields and global economic uncertainty, despite the recent USD strength.”

Townsend Lansing, head of exchange-traded commodities at ETF Securities, said at a briefing today: “We expect gold flows to remain elevated this year with the US election in November, the issues with Italian banks and uncertainty over when Article 50 will be triggered for the UK to withdraw from the EU.”

Nicholas Colas, chief market strategist at Convergex, a global brokerage company based in New York, said in a note today that gold prices are up 27% year-to-date and that US-listed ETFs have been an important buyer of physical gold this year, adding $16bn to their stockpiles from incremental money flows.

“Across all types of US-listed ETFs (equities, fixed income, real estate, etc.), gold funds now have 2.3% of all assets under management,” Colas added.

He continued that financial buyers have been the most important incremental source of gold demand the year as US gold ETF inflows so far this year have reached $16.2bn, almost as much as US equity ETF inflows of $16.9bn.

Colas said: “My bottom line on gold: it can move higher from here, for exactly the same reasons that financial assets can also continue to increase in value.”

He wrote that gold can move higher as investors believe Japanese and European central banks will continue to provide monetary stimulus and keep interest rates low for years, the US Federal Reserve will not increase interest rates soon and that the wave of populist sentiment visible in the Brexit vote and Donald Trump’s presidential campaign are a notable economic, as well as political, wildcard for policymakers.

“While impossible to quantify, there does seem to be a global sense of popular unease with regard to national economic policy,” said Colas. “Ever-more negative interest rates in Europe and Asia play a role here, as does the turnaround in the Federal Reserve’s previously avowed intention of normalizing interest rates.”

Arnold continued that over the past month the gold price has jumped over 6% while silver has risen over 15% prompting profit-taking. “Investors withdrew $68m last week from long silver ETPs, the largest amount since October 2014, after silver price reached the highest level since July 2014,” added Arnold.

In addition GBP outflows reached their highest level since April 2014, due to the Brexit vote according to Arnold. Positions in short GBP currency ETPs rose to a 27-month high of $42m last week and the vast majority of the fund flows went to establishing long Euro exposures.

“Stagflation could become an economic reality for the UK in coming years as business investment falters and consumers pay higher prices for imported goods as the weaker sterling directly boosts inflation,” said Arnold.

Global commodity ETFs/ETPs have gathered a record $26.53bn in the first half of this year according to ETFGI, the independent research and consultancy firm. The inflows helped boost reported assets invested in ETFs/ETPs listed globally to a new record of $3.177 trillion at the end of last month according to preliminary data from ETFGI’s June 2016 global ETF and ETP industry insights report.

Through to the end of June global ETFs/ETPs had net inflows of$122.71bn, less than the $152.66bn gathered at this point last year. Fixed income ETFs/ETPs gathered a record $67.63bn while equities had inflows of $15.15bn.

In the first half of this year Vanguard had the largest net ETF/ETP inflows of $42.28bn, followed by BlackRock’s iShares with $40.51bn and Nomura AM in third with $7.39bn according to ETFGI.

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