Physical gold has increasingly become scarce since most people have sought it as a safe haven. Online feedback and data too agree that the demand for gold bars and coins has been on the rise. It has been on a forward rise due to a number of events experienced in the year. For instance, the number of online searches for the keyword “buy gold” has been on the rise by about 500% in the past weeks.
Even though this is a positive sign that those who hold it may create a scarcity, no one knows the totally value and amount of gold that remains not invested. However, one event that saw an increase in the price of gold was the Brexit.
The Brexit formed a doom scenario for various financial markets all over the world. Stock markets started to lose ground, and the Sterling Pound was devalued. This saw an increase in the interest rate of gold coin and silver. More people went into purchasing precious metals as a haven for their investments.
The economic turmoil experienced by the Brexit vote was as a result of the unexpected outcome of the vote. Most people thought that the election would lead to a remain decision. When the opposite became true, financial markets took on a new turn. Stock markets were in the fall immediately after the leave decision was announced. However, the demand for gold rose as more Britons considered gold as a safe place to have their investments. The price of gold gained value in both the European and the US market. A further volatility of gold is expected to occur in the coming days.
The immediate aftermath of the Brexit was the sinking of the pound. The voting included a massive half million votes for the country to have the “leave” victory. The pound itself took a rather drastic fashion. People lacked confidence in Britain’s currency. This was as shown by the UK’s economy and shockwaves to their currency.
The last time such an economic turmoil was experienced in the UK was in the banking crisis in 2008. At this time, the price of gold went up by more than 30 percent in its value. In the following three years, the price of gold increased in value by over 150 per cent. The value of gold after the recent Brexit vote increased by more than 20 percent a few hours after. Investors sought for gold since it was the safest place to have their money after concerns of a looming meltdown in the stock market. Even though there has been an increased interest in gold, anyone that wants to invest here will benefit hugely as a long-term investment.