Gold bullion demand surges in run-up to EU referendum
New York (Jun 22) Demand for gold bullion has surged as people have snapped up coins and bars while the EU referendum result is too close to call, according to the Royal Mint .
Since the start of June, transactions on the Royal Mint’s online trading platform have increased by 32% from the previous month and revenue has jumped by almost 150%.
The Royal Mint’s director of bullion, Chris Howard , said: “Overall since early 2016, demand for precious metals has risen, particularly with gold. While we are uncertain at this stage on what impact the results of both the European referendum vote and the US elections will have on the gold market, with the Royal Mint’s trading platform and our significant gold holding, we are prepared for possible market turbulence.”
Investors turn to gold in times of uncertainty because it is seen as an asset with intrinsic value and has a history of maintaining or increasing its worth when other asset prices are falling.
Royal Mint gold bars range from a 1g item costing £50.32 to a 1kg bar costing £28,605.59 . Customers based in the UK and abroad can also buy a fraction of a 400oz gold bar held in the Royal Mint vault.
A single 22-carat gold sovereign weighing almost 8g costs £229.39 and a Britannia 1oz coin made from 999.9 fineness gold costs £929.98. Both coins were in demand, Howard said.
The gold price hit a near two-year high of $41,757 last week but slipped from its peak when campaigning in the EU referendum was suspended after the killing of MP Jo Cox . It was trading at $40,855 on Tuesday afternoon after fears receded that the UK would vote to leave the EU.
Along with the EU referendum, gold prices have risen with expectations of a US interest rate increase and fallen when the Federal Reserve have been considered less likely to raise borrowing costs.