

So-called Brexit concerns already have significantly jolted financial markets, but more could be in store if the fears become reality and the U.K. votes to exit the European Union.

Gold US:GCQ6 is set to become one of the biggest beneficiaries of a leave vote on June 23 and could rise as much as 8% from current levels, according to James Butterfill, head of research and investment strategy at ETF Securities.

“Brexit would be very beneficial for shorting sterling and we will probably see a big pick up in gold. In that scenario we think gold could hit $1,400 [an ounce],” he said on the sidelines of the Inside ETFs Europe conference in Amsterdam.

“We’ve looked at previous risk events and for instance when Greece nearly left the Eurozone [in the summer of 2015] we saw really elevated futures positioning. We are making the assumption that we would see net longs for quite an extended period of time in gold in a Brexit scenario,” he said. He stressed, however, that a U.K. exit from the EU, or Brexit, isn't what he thinks will mostly likely occur.

Early polling suggests that the vote next week will be close. Recent surveys show an increase in support for the “leave” campaign. Meanwhile, the bookmakers are still pointing to a narrow win for the “stay” camp. That uncertainty is fueling jitters in the financial markets. The pound GBPUSD, +0.02% , for example, has shaved off 2.3% against the dollar in June so far, while the U.K. blue-chip benchmark, the FTSE 100 index UKX, -0.70% , is down 4.8%.

Gold, on the other hand has been one of the best performing assets with a 7.7% rise this month, partly lifted by a dovish statement from the Federal Reserve.

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Since the beginning of 2016, the metal has rallied a whopping 24%. That compares with a lackluster 1.4% gain for the S&P 500 SPX, -1.11% and 12% drop in the Stoxx Europe 600 index SXXP, -0.66% .

Butterfill said ETF Securities has seen an inflow of $2.6 billion into gold this year, boosting the metal’s share of the company’s asset under management to 14%.

“I think it has happened for various reasons. One is Brexit, another is a non-establishment presidential candidate in the U.S.,” he said, referring to the presumptive Republican presidential nominee, Donald Trump. He said the other concern is the Federal Reserve’s interest-rate policy, which appears to be on track to remain unchanged for the near term, a fact that would be supportive to gold prices.

“These are three quite significant risk events, so that’s why we are seeing popularity with gold,” Butterfill said.

That also means a rally to $1,400 an ounce would have legs and not just translate into a short-term shaven trade, Butterfill said.

“I was actually surprised when [Fed Chairwoman Janet Yellen] mentioned Brexit for the first time in her speech last Monday. It’s clear they are thinking about how much instability it creates. The implications could have a domino effect with other fringe parties around Europe pushing for a referendum. It’s not a nice investment environment,” he said.

The August contract for gold traded around $1,311 on Thursday.