UK-based gold trader Ash Kundra claims to have recently run out of gold coins and bars due to a surge in demand for the precious metal. The pound’s plunge to record lows against the dollar and turmoil in financial markets are said to be responsible for the surge in demand for precious metals.
Demand for gold has “increased exponentially”
U.K.-based gold dealer Ash Kundra revealed repeated shortages of gold coins and bars in the days following U.K. Treasury Secretary Kwasi Kwarteng’s mini-budget proposal. Kundra, who operates in London’s Hatton Garden jewelry district, suggested in a Bloomberg report that demand for precious metals “increased exponentially” in the wake of Kwarteng’s controversial proposals.
According to the report 21} the rush to gold by Britons occurred at a time when the U.S. dollar value of the precious metal was down about 20% from its March peak of just over $2,060 per ounce. However, turmoil in the U.K. financial markets and the fall of the pound to record lows against the dollar have made gold an attractive option once again.
This is said to be one of the reasons why the British people were so eager to get their hands on the precious metal. Kundra sees it as follows.
coins are in short supply and bars continue to be in short supply.
BullionVault, a member of the London Precious Metals Market Association, reported that the number of Britons opening accounts to buy gold bullion was more than double the usual.
In addition to buying gold, many UK residents are believed to have sought safety in cryptocurrencies. As Messari, a leading provider of crypto market intelligence products, points out, on the same day that the pound hit an all-time low against the dollar, both British and EU investors are believed to have acquired bitcoinusing their respective currencies.
Meanwhile, in addition to using gold as a hedge against currency declines, many in the UK are reportedly using the precious metal as collateral. Jim Tannahill, managing director of Suttons and Robertsons, commented on the reported use of gold as collateral by the British, which he expects to increase in the future.
“We expect to see an increasing trend of people using gold as collateral for loans in the coming months, while this period of extreme uncertainty exists,” Tannahill is quoted as explaining.
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