The United Kingdom-based gold dealer, Ash Kundra, has claimed that he recently ran out of gold coins and bars after the demand for the precious metal skyrocketed. The pound’s plunge to a record low versus the dollar, as well as the turmoil in financial markets, is said to be the cause of the sudden increase in demand for the precious metal.
Demand for Gold ‘Increased Exponentially’
A United Kingdom-based gold dealer, Ash Kundra, has revealed that he repeatedly ran out of gold coins and bars in the days that followed the United Kingdom treasury chief Kwasi Kwarteng’s mini-budget proposal. Kundra, who operates from London’s Hatton Garden jewelry quarter, is quoted in a Bloomberg report suggesting that demand for the precious metal had “increased exponentially” following Kwarteng’s controversial proposals.
According to the report, the rush to gold by Britons came at a time when the precious metal’s U.S. dollar value was approximately 20% lower than its March peak of just above $2,060 per ounce. However, the turmoil in the U.K. financial markets, as well as the pound’s slide to a record low versus the dollar, meant gold was again a more alluring alternative.
This, in part, is said to explain why those in the United Kingdom were scrambling to get their hands on the precious metal. As Kundra observed:
I keep running out of coins, I keep running out of bars.
At Bullion Vault, a member of the London Bullion Market Association, the number of Britons who opened accounts to buy gold was reportedly more than double the usual rate.
In addition to buying gold, many British residents are believed to have sought safety in cryptocurrencies. As noted by a leading provider of crypto market intelligence products, Messari, a record number of investors from the U.K. and the EU are thought to have acquired bitcoin using their respective currencies on the same day that the pound touched an all-time low versus the dollar.
Meanwhile, in addition to using gold as a hedge against currency depreciation, many in the U.K. are now reportedly using the precious metal as collateral. Commenting on Britons’ reported use of gold as collateral, Jim Tannahill, the managing director of Suttons and Robertsons, said he expects to see more and more of this.
“We anticipate we will continue to see an upward trend in people using gold as loan collateral in the coming months whilst this period of extreme uncertainty exists,” Tannahill is quoted explaining.
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Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
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