Photo: Chris McGrath/ Getty Images.

The spot gold price has ripped higher in Asian trade, rising to as high as US$1,311.10 an ounce, the highest level seen since August 2014.

Growing fears over a UK “Brexit” from the European Union, and the subsequent fallout on financial markets, along with US dollar weakness thanks to investors rushing back to the relative safety of the Japanese yen, have both contributed to the move.

Spot silver prices are also on the rise, recently hitting as high as $17.86 an ounce, a level not seen since May 2 this year. Investors may be eyeing a move back above $18.01 level, something that would mark the highest level since January 26 last year.

Earlier this week HSBC’s chief precious metals analyst, James Steel, suggested that the gold price would surge should a Brexit vote get up, forecasting that spot prices could rise to as high as US$1,400 an ounce.

“As a risk-off asset, gold would likely rally in the event of a leave vote. We anticipate a sizable safe haven bid in gold in this event,” said Steel.

“The argument for this is straightforward. The uncertainty spurred by an exit vote would likely elicit sufficient gold purchases to buoy prices. The link is the interconnection between the gold market and wider financial markets.

“In periods of uncertainty, gold is often one of the few liquid perceived safe haven assets. It is also historically negatively correlated with risk-on assets.”

If there’s one thing that’s characterised Asian markets on Thursday, it’s been that uncertainty and risk aversion are rife.

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