While Americans were busy barbecuing and shooting fireworks on July Fourth, the precious metals market saw renewed fireworks thanks in part to Chinese investors.

Silver especially sparkledMonday, launching a 7% run higher and climbing above $21 for the first time since July 2014 before easing Tuesday near $19.88.

Silver has gained 47% at its peak in 2016 and has risen by 55% since its December 2015 lows. In contrast, gold is up about 27% for the year.

The gold-silver ratio, or the number of ounces of silver needed to buy a single ounce of gold, fell to around 64:1, its lowest level since August 2014. Thats down from the 83:1 peak reached in February.

Concerns over Brexit aftershocks continue to fuel the ascent of both gold and silver, but another factor played intoMondayssure in silver: Chinese investors.

The price of silver surged to a two-year highon Mondayas buyers in China made bold bets in the futures market and scooped up vast volumes of physical metal, The Wall Street Journalreported. On the Shanghai Futures Exchange, the most actively traded silver futures contract jumped for a fourth straight sessionon Monday, hitting its 6% daily maximum at opening to reach 4,419 yuan ($663) akilogram.

An increasing number of commodity-trading platforms in China also helped driveMondaysaction. The emergence of commodity trading venues in China has, however, changed the balance in the market, Saxo Bank analyst Ole Hansen noted. Back in April,a sudden rise in demand for steel rebar and iron ore futures from Chinese day traders triggered a major surge in daily volumes.

However, silver also is commonly viewed as a high-power play on golds movement, with the white metal often outpacing the yellow metal in percentage gains in bullish markets. And so, following the Brexit vote traders around the world, not least in China, have increasingly cast their eyes on silver, Hansennoted.

Western demand also is supporting silver. Holdings in silver-linked ETFs hit record highs in June, and coin and bar consumption remains robust. One United Kingdom bullion dealertold Bloombergthat silver buying was trumping gold purchases at his firm.

The UK demand for Silver Britannia coins is very strong, he said. Three times more than average.

And in the U.S., sales of the Mints silver American Eagle bullion coins continue at a record-breaking pace, with938,000 ounces sold in the pre-holiday week the best weekly total since late May. So far, investors have snapped up more than 26.2 million silver Eagles 20% more than at the same time last year.

Silver has benefited from its dual identity as both a monetary metal and a key manufacturing component. The metal continues to be buoyed by its unique position as both an industrial metal in risk-on conditions and a safe-haven asset in times of uncertainty, MKS trader Sam Laughlin noted.

In addition to the digital and medical industries, silver also is crucial to the burgeoning solar-power sector.”Silver is increasingly used in solar panels now, Jeremy Wrathall of Investecsaid. Something like 10% of demand comes from solar panels. Solar panels is a growing source of demand for silver, so you have got an additional attraction for silver as well, as a commodity investment and also industrial usage.”

Although silvers profit-taking pullback in the wake ofMondayspowerful surge was expected, the metal likely is building a base for further moves higher as the fallout from the Brexit referendum continues torattle global financial markets.

Negative-yielding sovereign bonds around the world now totalat least $11.7 trillion. Switzerlands 50-year bondhas fallen into negative territoryfor the first time in history. And now the yield on the benchmark 10-year U.S. Treasury bondhit a record lowon Tuesday.

Its the only way to find income, Allianz Global Investors bond expert Franck Dixmierlamented. And Morgan StanleyInvestment Management fund manager Jim Caronasked, When you look at pension liabilities, insurance, where are you going to get a positive yield? At this point, its the best the market can do.

So, a roughly 1.3% return over 10 years (not even accounting for inflation) is the best the market can do? You dont have to look far for alternatives. Just look at two of the top-performing assets of 2016: gold and silver. Gold has gained as much as 27%, while silver has returned an astounding 44% at its zenith.

The pension funds and insurance companies Caron cites are woefully underinvested in the precious-metals sphere. Moreover, many are facing huge unfunded liabilities. A Citigroup study published this year found that20 countries that belong to the Organization for Economic Cooperation and Developmentare facing liabilities totaling $78 trillion!

Negative yieldswill have a massive and negative effect on most pension schemes funding plans,predictedWarren Firth, actuarial director at Broadstone in the United Kingdom.

If yields continue to fallworldwide, many of these funds will plunge further into a sea of red ink. And if the U.S. economy takes a turn for the worse, or contagion from the Brexit situation spills over beyond Europe, then the Federal Reserve could well beforced to consider negative interest rates.

Yields in even Treasury bonds are so low that we already are seeing negative real interest rates in the U.S. Negative rates are rocket fuel for gold prices, as the World Gold Councilhas demonstrated, while they make business more difficult in many ways for banks as well as pension funds.

A move by the Fed into negative rates could take even more shine off already-anemic Treasury yields. At that point, golds attractiveness as a viable alternative to dismal yields could gain even further ground.

Institutional gold buying by central banks has been a key pillar of support for gold over the past few years. Increasing engagement from pension funds desperately searching for yield could mark the next leg up for a renewed bull market in gold.

Weve already seen high-profile moves into physical gold in recent years from Texasteacher-retirementanduniversity- endowmentsystems, whileJapanese pension fundshave increasingly sought safety in bullion.

Look for interest in gold to grow as investors balk at paying fees to hold government bonds or to keep their money in negative-yielding bank accounts. And should another debt-ceiling debacle dent the faith of global investors in U.S. Treasuries, look for that growing interest in gold to become, potentially, a stampede.

With silver backing off from its blistering July Fourth run above $21, gold finished Tuesday near two-year highs in a fifth straight trading day of gains.

The metal was trading at $1,355 by midafternoon, while silver dropped about 2% to touch $19.89.

And in another sign the concerns over the United Kingdoms Brexit vote are being felt globally, bullion sales at a top Japanese gold retailer, Tanaka Kikinzoku Kogyo K.K.,jumped 1.8-foldbetween June 24 and July 4, versus the previous week.

Gold-linked exchange-traded funds also continue to draw investors who have been bruised by stock-market volatility, with holdingsrising by 500 tonsin the first half of 2016.

“Safe haven demand has continued to grow, Phil Streible of R.J. O’Brientold Reuters. A lot of people believe that global monetary easing worldwide is going to continue.

Indeed, at the epicenter of the Brexit turmoil, the British poundplunged to a fresh 31-year low. Meanwhile, the Bank of England partnered with eight major commercial banks and promised to stand at the ready with more liquidity, saying the fallout has just begun.”There is evidence that some risks have begun to crystallise. The current outlook for UK financial stability is challenging,” itwrote.

And a top European Central Bank official warned that the UK is facing simultaneous inflationary and recessionary forces. In the short term there is a difficult challenge for the British economic and monetary policy between two contradictory challenges: There is the challenge of inflation, with the effects on inflation of the fall of the pound, which is down 11 percent since Brexit, said Francois Villeroy de Galhau.

And then there is recession challenge with the tendency to see less growth due to the uncertainty impact on investments. And it is always very complicated for monetary and economic policy to be caught in this dilemma.

The Bank of Englands governor, Mark Carney, has already hinted that more quantitative easing andinterest-rate cuts are on the way, and Bank of America Merrill Lynch analysts concurred. Given the uncertainty and likely economic downturn, we expect the BOE to use its financial crises play book, they wrote. That means ignoring sterling-driven inflation, quickly taking interest rates to, or close to, zero and subsequently restarting QE.

And here in the U.S., investors were preparing for the release of the Federal Reserves latest minutes, dueWednesday, and also girding forFridaysrelease of the June employment report.

A factory-orders report for May was released Tuesday,showing a 1% drop. Zero Hedge noted that this marks the 19^thstraight monthly year-over-year decline in the metric.In 60 years of historical data, the U.S. economy has never, ever suffered a 19-month stretch of consecutive annual declines, itwrote.

And with the end of June comes the start of another corporate earnings season, with analysts forecasting the longest profit recession since the financial crisis, Londons Financial Timesreported.

With all this pressure on the Fed not to rock a precarious global economy with an interest-rate hike, furthertightening seems off the table for the rest of 2016, at the least. Some experts are even predicting more easing from the Fed in the coming months, with JimRickards of Strategic Intelligencetelling CNBC, Maybe the Feds next move is a rate cut some time next year. Fed chief Janet Yellens needs the weaker dollar to import inflation into the U.S. The Feds nowhere near their inflation target.

As global central banks launch the same old tools to control the Brexit crisis, with bond yields plunging further into negative territory, other gold watchers are predicting new record highs.

“I think over the next 18 months we’ll make new all-time highs,” Swiss Asia Capital’s Juerg Kienersaid. “No, I’m not going to give you a number because I don’t know insane central bankers can be. They are surprising me all the time with new stuff.”

ButChristopher Wood of CLSA is giving us a number. A long-term bullish view is maintained on gold bullion, with the ultimate price target now set at US$4,200 an ounce, Woodtold clientsTuesday.

This is because the view here remains that central banks, including most importantly the Federal Reserve,will not be able to exit from unconventional monetary policy in a benign manner and will remain committed to ongoing balance-sheet expansion in one form oranother. Such policies will ultimately discredit central banks pursuing unconventional monetary policy, threatening the stability and indeed integrity of the current fiat-paper-money system.

Brexit has proven to be the icing on the cake for an already-stellar year in precious metals. With June now over, the top two metals were the best-performing assets for the month.

Gold finished the first half of the year with a 25% gain and is trading at more than two-year highs. The first six months of 2016 represent golds best first-half annual performance since at least 1980. Meanwhile, silver logged a 33% increase. What other milestones and even records have been set since the United Kingdom voted in favor of leaving the European Union?

1. Silver has surged above $19: While golds 8.8% advance in June (its biggest monthly increase since February) was impressive, silver managed to outperform the yellow metal by breaking the $19 level for the first time since September 2014 in its best weekly move since August 2013 (with an 8% advance that saw it touch $19.40). The white metal returned a blistering 17% in June.
2. Top gold ETF breaks all-time record: The SPDR Gold Shares exchange-trade fund, the worlds largestbullion-linkedETF, experienced its biggest inflows ever in the first half of the year. The more than $12 billion invested so far in 2016 is greater than what the fund gained in its biggest year ever, 2009. The GLD is attracting more capital now than 6,000 other ETFs tracked by Bloomberg and has added more than 300 metric tons for its highest level since at least July 2013. Meanwhile, holdings in all gold-backed ETFs tracked by Bloomberg have grown by 34% to 1,952 tons as of June 30.
3. Trading volumes the best in 40 years: Futures volumes on the CME have never been higher in the first half of any other year. More than 28 million contracts were traded in the first six months of 2016.
4. U.S. Mint coin sales higher than last year: The six-month rolling averages of the U.S. Mints gold and silver sales are both higher than a year ago, with $65 million spend on the yellow metal and $85 million invested in silver, according to a Convergex analysis. Of course, silver American Eagle sales are notably on course to smash last years all-time record of 47 million ounces, with 26.25 million already purchased. Gold American Eagle sales are almost 84% higher than where they were at this time last year, while gold Buffalo sales are nearly 17% greater than at the same time in 2015.
5. Gold priced in the British pound retakes key level: Not only has gold priced in the U.S. dollar definitively broken through the $1,300 barrier, but gold denominated in sterling has rallied back above 1,000 pounds now that the Bank of England is vowing to cut rates and add billions worth of monetary accommodation to the financial system to ease post-Brexit stressors. UK investors have now seen pound-priced gold enjoy its best week since April 2013 and its best month since August 1982. Gold priced in the pound has returned an astounding 40% since the start of the year. Meanwhile, gold priced in the euro also had a breakout week.

With the smoke only just beginning to clear from the Brexit referendums aftermath, look for gold and silver potentially to reach more new milestones as 2016 unfolds.

The Chinese gold market has been notoriously opaque over the past few decades, but thats now changing as its Shanghai and Hong Kong metals exchanges increase their visibility with new investment products and growing participation from Western banks, and its central bank is now reporting additions to its official reserves.

And while some analysts say the United Kingdoms June 23 vote to exit, or Brexit, the European Union will have few lasting global economic effects, investors in China apparently beg to differ. The most eye-catching sign of Chinas post-Brexit gold rush is the surging action in its major bullion-linked exchange-traded fund.

Heeding warnings of recession and contagion from numerous reputable sources, Chinese investors are rushing to gold as a haven after the U.K.s vote to quit the European Union, Bloomberg reported Monday.

Turnover inHuaan Yifu Gold ETF, Chinas top exchange-traded fund backed by bullion, jumped to a record 1.27 billion yuan ($191 million) Friday after Britains vote, the news agency added. Outstanding shares of Huaan also reached a record 1.6 billion on June 20, jumping five-fold from the start of the year.

Sharp uptick at Shanghai exchange: For the past few years we only saw tepid Chinese interests in these gold funds, Shanghai Leading Investment Co.s Shihua Duan told the agency. Now theres a surge and a lot of people havent realized that this surge is only the beginning.

China has always been crazy about physical gold such as jewelry and coins, to the detriment of its ETF industry. The current holdings of the top four such funds only total about 28 tons even after major inflows this year; Duan argued that that number should rise eventually to at least 600 tons.

Meanwhile, activity on the Shanghai Gold Exchange also erupted in the Brexit referendums wake. There has already been a sharp uptick in activity on the Shanghai Gold Exchange, the World Gold Council noted in a June 24 update. Trading volume spiked, reaching 346t compared to a daily average of close to 100t since the start of the year.

Hong Kong exports to mainland leap: In another sign of growing demand, Chinas imports from Hong Kong in May jumped to their highest level in five months, with 115 tons brought to the mainland for a 68% month-over-month increase and a 63% year-over-year rise.

Furthermore, in the leadup to the Brexit vote, Switzerlands gold exports to mainland China started rising, with a 36% month-over-month increase in May of 19 tons, while the 24 tons sent to Hong Kong almost tripled the previous months total.

The year 2016 has seen a topsy-turvy shift in gold-demand patterns. After a record level of gold consumption in China in January, Western investors who had forsaken gold in favor of stocks also found their way back to the metal as the U.S. stock market plunged early in the year. But Chinese demand appeared to ebb somewhat after the January peak, as did Western investment as equities stabilized. Now, though, with Brexits potential after-effects being felt globally, both Eastern and Western gold buyers seem to be returning simultaneously to the gold fold, and that bodes well for predictions of $1,400 and higher bullion prices.

The timing of the Brexit vote and outcome was fortunate in the sense that it gave the financial markets a full weekend to digest the news and gather their bearings. Now that markets have resumed trading in a new week, many investors are wondering what fallout from the Brexit vote they can expect to see in the coming weeks and months.

As far as the financial markets are concerned, look for them to remain volatile for some time to come. Stock indexes are likely to fall as equity investors recalibrate their expectations after the run-up before the Brexit vote. Certain sectors may suffer more than others, in particular the banking sector as Treasury yields slide and interest rates follow suit. A potential market rebound wouldnt be surprising at some point, when well-capitalized investors seek out bargains in the stock, currency or commodities markets. Moreover, gold prices may pull back after the recent strong rally to safety when some traders look to take profits from these gains.

Its likely that market uncertainty will prevail in the near term as the dust from the Brexit referendum continues to settle. Were already seeing some unexpected post-Brexit reactions ripple through the political world in the U.K., with leadership changes affecting both major political parties. This instability is likely to test market psychology in the coming weeks.

Plus, investors should remain wary of a potential unexpected, unforeseen disruption to the financial markets. Trading was reported to be stressful and hectic but relatively smooth on Friday following the Brexit vote. That is a positive sign of the resiliency of the financial markets. Should something out of the blue occur, it will probably rattle the already shaky nerves of investors. Events in the next few weeks will test how much resiliency markets really have and if they can continue to operate efficiently.

Political uncertainty in the U.K. and the European Union will likely not abate anytime soon. The Brexit result may motivate citizens with strong anti-establishment views in other countries to push for their own referendums on sovereignty and the future of political unions. In the U.K. itself, there has been plenty of political chatter in the wake of the Brexit vote of Scotland and Northern Ireland breaking with Britain and forging their own ties with the European Union. The map of voting results shows near overwhelming support for Remain among citizens in Scotland and Northern Ireland compared to England and Wales. (See map at right.) Outside of the U.K., strong anti-E.U. opposition already exists and may look to Brexit for inspiration for staging their own referendums. (Could a Frexit be around the corner for France?)

On the economic front, the effects of Brexit should land more heavily in the U.K., where economists are already predicting a significant slowdown in growth just stemming from the Brexit vote itself, before any changes actually occur with treaties or trade agreements. Ripples of an economic slowdown could wash up on E.U. shores, where Britain represents over 17% of the Eurozones gross domestic product. And because the U.K. is the fifth largest global economy, a drop in economic activity there could reach beyond Europe too, into the U.S. and Asia, although the effects arent likely to be as strong. How Brexit will really affect economic growth will likely remain uncertain for many months, because no one knows when Britain will actually start the formal process of E.U. withdrawal and what the outcomes of the new treaties and trade agreements will be. Differences in the expected timing of the exit are already apparent between Britain, where the process may be delayed until new leadership is in place, and the rest of Europe, where leaders from Germany and France have expressed their wishes for an earlier start to the U.K. formal withdrawal.

It will be interesting to watch the reaction to Brexit in other European countries and listen to how their leaders publicly discuss the future of relations with Britain. Many of these governments are facing elections of their own in the near future and fielding the passions of their sovereignty-minded citizens who have been energized by events in the U.K. These leaders may have an interest in making Britains abandonment of the European Union look difficult, and therefore an unattractive alternative to voters considering their own take on Brexit.

With all of this pervasive volatility and uncertainty, safe haven assets will continue to have an appeal to investors looking to downplay risk and protect their accumulated wealth.