Belfast Telegraph

Scottish independence: Gold rush is on as Scotland independence poll spooks investors

By John Mulgrew

Fears over potential financial uncertainty should Scotland vote Yes for independence is prompting concerned investors to turn to gold, it has been claimed.

Gold dealer Jon Barker, who runs Gold Coins NI in Newry, Co Down, has said he has witnessed a "significant bump" in sales from new Scottish customers – as well as those closer to home – who are investing their cash in the precious metal ahead of today's momentous referendum.

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"I've definitely noticed an increase in recent weeks – gold has always been a bit of a fear trade," he said.

"In times of uncertainty, people end up turning towards it."

He said customers had invested between £2,000 and £10,000 in coins and bars ahead of voters going to the polls today.

"There are very real fears about a Yes vote, as well as the implications on the currency," he said.

"That's what I've been told by customers, who are concerned about a potential decline in the strength of sterling.

"If Scotland was to leave the Union there's a real possibility that sterling will suffer a crash."

The Better Together campaign has sought to introduce uncertainty over a breakaway Scotland's currency situation in the event of a Yes vote.

According to Scotland's First Minister Alex Salmond, a number of options exist including the country continuing to use sterling, or introducing its own currency.

Jon Barker – who has been dealing in the metal as Gold Coins NI since 2012 – said he expected to see a further increase in business from Scotland in the coming weeks.

"People are using gold as an insurance – they are seeking an asset with a bit of history behind it, and something that can stand up to economic turbulence," he said.

"If it's a Yes vote I think there will be enough volatility to make some people turn to gold as a way of maintaining their investments."

This week, banking giant UBS warned that anything other than a decisive No vote in the Scottish referendum risks an economic slump in the country.

A narrow victory for the No campaign and a retention of the union could still lead to a downturn as uncertain investors may be spooked by the possibility of another referendum in the near future, the bank said.

UBS economist Paul Donovan said the so-called "Quebec scenario", named after the economic dip the province suffered after narrowly rejecting independence from Canada in 1995, could threaten jobs and investment.

Mr Donovan also raised the possibility in the event of a Yes vote that the UK monetary union may not last the transitional phase before independence as savers with Scottish bank sort codes "scramble" to take their money out of the country. He said First Minister Alex Salmond's assurances that the referendum is a "once in a generation" opportunity may fall on deaf ears in the markets.

Such a situation occurred in Quebec despite assurances that there would not be another referendum, and its economy is still under-performing today, he said.

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