Grexit uncertainty sparks gold rush, The Royal Mint launches Signature Gold and China plans yuan gold fix.
Grexit uncertainty sparks gold rush
Greek investors are clamouring to buy gold as uncertainty hangs around Greece’s possible exit, or Grexit, from the Eurozone.
During June, The Royal Mint experienced twice the expected demand for Sovereign bullion coins from customers based in Greece. There were also significant increases in traffic to royalmintbullion.com from across the Eurozone.
This could be due to the fact that Greece has recently imposed capital controls, including closing the banks and stopping the sales of gold coins to the public until at least July 6, 2015.
Investors are expected to start using gold as a hedge as Greece has failed to repay €1.6bn (£1.2bn) to the International Monetary Fund (IMF).
Figures released last month by the World Gold Council showed that German investors had increased their buying of gold coins and bars of bullion by 20%, the highest rate of purchases seen in a year. This is also thought to be due to growing unease over the situation in Greece. You can find out more in our May roundup.
Royal Mint Bullion starts selling gold by price
For the first time, The Royal Mint has started selling gold by price, opening up its trading to even more investors. Previously, the choice was always between gold coins or bars. The cheapest gold coin is currently around £90 and the gold bars start at around £780. However, this new product – Signature Gold™ – offers the buyer the ability to purchase gold based on monetary value e.g. £20 instead of by fixed weight.
Customers hold full legal title over every ounce and can buy and sell it back to The Royal Mint as they choose.
Martin McDade, The Royal Mint’s Director of Bullion, said: “The launch of our online bullion platform last September opened up gold trading to an audience that may previously have been put off by the perceived complexities of the market.
“With the introduction of Signature Gold™, we hope to expand this audience even further.”
China to launch yuan gold fix
The Shanghai Gold Exchange has announced its intention to launch a yuan alternative to the London gold fix. The launch will be sometime this year, but no actual date has been set.
As the largest global buyer of gold, China wants more influence over the pricing mechanism for gold.
The Shanghai Gold Exchange president said the new fix will merely provide a more diversified pricing benchmark. But many gold analysts actually believe the new yuan fix is just another step in China’s plan to eventually launch a gold-backed currency.