Brexit Effect on Gold

Many investors around the globe thought that the Brexit vote would be a “remain” decision, many were surprised when the opposite came true. As soon as the leave decision was announced, the stocks markets started sliding, and demand for gold started going up. The day after the vote, the prices of gold went up from £ 852 to around £1004. Gold is a very rare metal, and its value could not be sustained. As the day went by, its price settled around £ 950. This trend was also experienced in the United States following the Brexit. This surge was the highest since the 2008 global financial crisis.

Being a rare commodity ensures that gold is not affected by any financial crisis. Its value remains. Many Britons who bought the gold once the exit decision was made described that they were driven by the worry that banks would collapse and their lifetime savings would probably disappear. However, the trend has shown that the rush was mainly from first-time buyers. Some experts explained that this Brexit gold rush could have some serious repercussions for investors and people trying to save their hard earned cash. The rush puts them at a serious risk of missing on returns experienced from gold trade.

What many people buying gold after the Brexit didn’t know is that how you buy your gold is also important like the time you bought it. Just like any other major asset, some proportion of the gold many people bought after Brexit was eaten up by dealing costs. Experts advised buyers to consider some issues before rushing into buying gold after the exit. This issues included questions like who would buy your gold afterward. People rushing to buy gold after the exit were also advised to put into consideration the difference in buying and selling prices.

The rate of net worth to physical gold conversion before Brexit was estimated to be around 5-10 percent. However, after the exit vote was announced, this rate jumped to an average of 45%. In a single weekend between 25-26 June, an estimated $5. 5 million worth of gold was sold online on a platform known as the Bullion vault that is based in London. It’s important to note that this is not the first time that Britons have turned to gold as their safe heaven. They have done this previously during the 2008 financial crisis as well as during the 2012-13 European debt crisis. Us Money reserve is an American company that specializes in issuing gold in USA. The head of the company is known as Philip Delhi. It’s important to note that the institution deals with government issued coins only.

Learn more: http://fortune.com/2016/07/18/britain-gold-investing-brexit/