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Snap election the volume of gold purchases has doubled up 117% in UK


Gold Prices

Wed 05 Jun 2024 | 11:48 PM
Waleed Farouk

Last month, UK Prime Minister Rishi Sunak called a snap election, with voters heading to the polls on July 4.

The Royal Mint said that bullion demand has increased since Sunak dropped the writ.

Last month, UK Prime Minister Rishi Sunak called a snap election, with voters heading to the polls on July 4.

“Since the snap election was called, there has been a 49% increase in the number of customers buying precious metals bullion through The Royal Mint while the volume of gold purchases has doubled (up 117%) from the previous week. The Royal Mint’s bullion division has seen customer spending increase by 145% week-on-week while there has been a 10% uplift in first-time investors,” the mint said in a statement.

The report also noted that 49% of bullion buyers were between the ages of 44 and 59 years old. UK bullion demand appears to be bucking the broader trend, as research has shown that Generation X has the lowest interest in gold compared to older Baby Boomers and younger Millennials.

They said that physical investment products, including 1oz gold and silver Britannia coins, large gold bars, and sovereign coins, have proven to be particularly popular alongside The Royal Mint’s suite of digital products.

“The uplift in precious metals investing we have seen over the past week seems to have been driven by ‘safe-haven’ buying from investors who are attempting to mitigate the risks associated with the current uncertainty. Elections lead to increased questions around the future of the economy, tax, and security, which can cause spikes in investment activity and greater interest in precious metals,” Stuart O’Reilly, Insight Manager at the Royal Mint, said in the report. “Due to gold’s safe-haven status and lack of correlation with other assets, we tend to see surges in the buying of gold coins and bars when investors are uncertain about the future. In addition to the general election, investors are keeping a close eye on whether interest rates will come down and when that might happen, as well as looking ahead to America’s elections in November.”

UK markets have been highly sensitive to leadership turmoil in the British Parliament. Prime Minister Sunakcame to power in 2022, the third prime minister that year. He replaced Prime Minister Liz Truss, who roiled bond markets for three weeks after announcing a budget that proposed tax cuts and increased spending.