Belfast Telegraph

Gold rush as Northern Ireland investors take a shine to the precious metal as safe haven

By Yvette Shapiro

Gold coins are becoming hard to find as Northern Ireland investors rush to put their money into a "safe haven".

Uncertainty over Brexit, fears over the world economy and consistently falling interest rates causing a poor return on savings have fuelled the demand for precious metals.

One Belfast jeweller has seen a doubling of trade in gold coins in the past six months and says customers are joining waiting lists to get their hands on sovereigns.

"There's been a definite surge in demand this year," said Don Warwick, owner of Warwick Jewellery on the Newtownards Road.

"Everyone wants British gold coins because there's no tax liability on them.

"The increase in demand started some time ago, but it's been even higher since the Brexit vote.

"Sovereigns are the number one choice and they're very hard to source at the minute. Once we get them in, they're sold again within 24 hours.

"I sold three this morning at £250 each and there are customers constantly looking for them, putting their names down to buy them as soon as we get them."

Figures from the World Gold Council show that investment demand soared 127% in the six months to the end of June compared to the same period in 2015 - the second highest half year on record.

Appetite for the precious metal was 16% higher than during the financial crisis, and Alistair Hewitt, head of market intelligence at the World Gold Council, said: "When a stress event hits, gold typically performs well and investors see its safe haven value.

"Negative interest rates are the primary concern for investors, and Brexit and the US election have also played their part in driving demand."

Newry firm Gold Coins NI has also seen a rise in demand for precious metals.

Spokesman John Osborne told the Belfast Telegraph: "The sterling price of gold has risen 20% since the Brexit vote and over 40% since the start of the year.

"Gold has played a part in human financial history for the last 5,000 years, so has clearly stood the test of time.

"The feedback we are getting is that some investors prefer to have assets outside of the financial system in the form of physical bullion. Silver has also risen 65% this year to date.

"We have also attracted the speculator investor because of uncertainty over stock market performance and historically low interest rates for cash deposits."

The flip-side of the rise in demand for gold, and the upward trend on price, means that householders with a stockpile of jewellery or coins are welcomed with open arms at jewellery and pawn shops, where they can achieve a good return on their assets.

But Belfast jeweller Don Warwick says private collections have been hugely diminished in recent years.

"I think people have very little gold left to sell," said Mr Warwick.

"People offloaded most of what they had around 2007 and 2008, in the depth of the recession when they were struggling for money. I reckon we've seen a 70% decline in the number of people coming in to sell their gold items.

"In addition, some people who do have gold to sell still don't believe that it's hit its peak in price, so they're holding off to see what happens. Others, though, are convinced it's gone as high as it can and they're putting what gold they have on to the market."

The Gold Council's latest report comes a week after the Bank of England cut interest rates for the first time in more than seven years, to 0.25% from 0.5%.

Alistair Hewitt said: "The current looser monetary policy phase will continue for many years to come, and the implications of Brexit will play out for a long time.

"There's not much certainty about - and this will continue to support demand for gold."

Belfast Telegraph