Gold hits more than 2-year highs ahead of crucial U.S. jobs report

As the Brexit referendum loomed, caution ruled the day during the Federal Reserves June 14-15 meeting, its latest minutes confirm, with central bankers holding rates steady while awaiting the June 23 votes outcome. And now investors are bracing for Fridays U.S. employment report to determine whether the economy here is hitting a rough patch of its own.

Although Brexit was on the Feds radar, weighing on its collective mind more was the disastrous May employment report, which saw only 38,000 jobs created. Participants generally agreed that it was advisable to avoid overreacting to one or two labor-market reports, the minutes read, but bankers were uncertain whether the May number was a definitive sign of a slowing economy.

$6 million bet predicts golds summer run:Golds reaction to the Fed minutes was muted, having already hit fresh two-year highs earlier Wednesday to reach $1,374, its best price since March 2014. The yellow metal has advanced for six straight trading sessions. Silver, meanwhile, was fighting to keep above the $20 level after topping $21 Monday.

Bullish futures bets on gold and silver remain at or near all-time levels in U.S. markets, and one $6 million ETF wager that bullion will keep rising through the summer caught CNBCs attention. Overseas, gold priced in the euro has consistently been rising since 2013, and Chinas largest gold-linked ETF hit a record high Tuesday.

Fridays jobs report will be key for investors in discerning just how significant the May employment report was. If the Labor Department prints another big subpar number, gold could conceivably make a run toward $1,400.

In the meantime, U.S. data Wednesday were mixed, with the strong dollar helping widen the nations trade deficit, while on the positive side, the ISM gauge of service-sector economic activity expanded.

10-year yield could sink below 1%: What is almost certain on Wall Street is that the Fed wont be raising interest rates at its July 26-27 meeting. As it is, market-driven rates on the 10-year U.S. Treasury and other sovereign bonds are in a race to the bottom (and even below zero in many cases) as Brexit aftershocks drive investors into so-called safe investments.

The 10-year T-bonds yield hit a record low Tuesday, and Allianz adviser Mohamed El-Erian even thinks it could sink below 1%. We no longer control our yield curve, he said.

The message of falling bonds is this: danger. Serious problems are starting to surface in several major British real-estate funds, and some major Italian and German banks are teetering.

Its starting to feel like 2008, Smith & Williamson fund manager John Anderson said. Somethings got to give. Government bond yields are telling you something very nasty is about to happen.

Widely respected DoubleLine Capital bond guru Jeff Gundlach concurred, saying, Things are shaky and feeling dangerous. I am not selling gold."

Giant firms tout new gold bull: Meanwhile, gold got resounding endorsements from some major investment banks, including the worlds largest asset manager, BlackRock.

Gold is poised to go much higher, said top asset allocator Russ Koesterich. The reality is we are in an environment where the economy is slow, volatility is likely to be heightened. In that volatility, you need some hedge in your portfolio and there are few of them that work as reliably as gold.

Gold is an effective hedge, not just against equity risk but also against credit risk and in an environment in which real rates are low and now increasingly negative, gold does an even better job in that role, he said.

The case for gold is now more compelling than ever, argued UBS analysts. Gold has likely entered the early stages of the next bull run, analyst Joni Teves wrote. This trend should now deepen, attracting more participants and encouraging those who have been hesitating to get more involved.

As Brexits spider web of unpredictable outcomes keeps unfolding, stay hedged with precious metals. The U.S. jobs report Friday has the potential to rip the mask off of festering problems lying just below the surface right here at home.