Gold Silver Reports — On June 23, 2016 the voters of Great Britain will decide whether or not to leave the European Union (EU), which Britain joined in the early 1970s. With a week until the decision is due, the forces of “Leave the EU” have increased sharply over the “Remain” vote.
(“Brexit) Vote is Also Lifting Gold
This has caused a collapse in the British pound in anticipation of the vote. This has also caused many Britons to exchange their weak pound sterling for gold. One leading British gold dealer said that the U.K. is outstripping all other regions for demand growth this month, up 59% in June. Their head of research said “we can only attribute that to Brexit.”
Goldman Sachs believes that a British vote to leave the EU would push the pound down 15% to 20%. The British Treasury sees an immediate 12% to 15% drop. The pound has fallen about 4% on fears of a British exit, but next week’s vote could send the pound sharply down, so British investors are switching to gold.
According to the Daily Mail, Brexit “is driving Londoners into the gold shops.” At bullion dealer Sharps Pixley, demand for bullion bars and coins has been rising sharply. Ross Norman, chief executive of Sharps Pixley, said that demand for Britannia coins (as legal currency, they are exempt from capital gains tax) have been particularly strong. Norman noted that younger folks are increasingly interested in gold. “We had a preconception of who the typical gold buyer was, which is male, mature and over 45. The mix of people coming through has completely rebuffed that idea – they’re often much younger, often female.” — Neal Bhai Reports