LONDON: Gold rose on Wednesday as the dollar retreated and investor appetite for safe assets remained strong because of longer-term financial uncertainty after Britain’s surprise vote to leave the European Union.

Bullion fell by about 1 percent on Tuesday as investors took profits from its biggest two-day gain since November 2008 as the British vote sparked sales of riskier assets.

The metal, often perceived as a hedge against economic and financial risk, surged 4.8 percent on Friday to $1,358.20 an ounce, its highest since March 2014.

Spot gold rose 0.6 percent to $1,319.96 an ounce by 1430 GMT on Wednesday, while US gold was up 0.4 percent at $1,323.10. Spot silver gained 3.4 percent to an 18-month high of $18.44.

“Although there are still big uncertainties ahead, looking at the way equities have performed over the past couple of days, a risk-on mentality is definitely coming back,” Mitsubishi Corp Jonathan Butler said.

“In the medium term, gold is going to be supported by the unlikelihood that the Fed will raise rates in the next couple of months.”

Global stock markets continued to recover after last week’s hefty losses, while the dollar was down 0.5 percent against a basket of leading currencies.

“If Brexit is seen severely impacting the market, central banks will step in to calm the markets, which would not be good for gold,” said Jiang Shu, chief analyst at Shandong Gold Group.

European leaders have asked Britain to act quickly to resolve the political and economic confusion unleashed by the so-called Brexit vote, with the IMF having said the uncertainty could pressure global economic growth.

Britain’s vote to leave the bloc could also drag on the US economy at a time when momentum in the country’s job market may already by slowing, Federal Reserve governor Jerome Powell said on Tuesday.

Markets will continue to monitor US economic data for clues on the timing of the next rise in US interest rates, with the nonfarm payrolls number scheduled for July 8.

Data on Wednesday showed moderate growth in consumer spending in May.

“The uncertainty around Britain’s vote has taken centre stage and unless US payrolls data comes up much higher than expected, I doubt it will change the Federal Reserve’s timing of

rate increases,” Commerzbank analyst Carsten Fritsch said.

Low interest rates are positive for gold because the opportunity cost of holding it decreases while the dollar falls, making the metal cheaper.

Platinum climbed 3.3 pct to its highest in three weeks at $1,007.15 and palladium rose 2.6 percent to $581.70.—Reuters