Gold demand hits record high, says Mint

INVESTORS flocked to gold in record numbers in 2023 as global economic turbulence triggered a flight to safety, according to the Royal Mint.

The number of people buying gold and precious metal bars and coins jumped by 7pc year on year, surpassing the highs of the 2020 lockdown investing boom. This was due to a jump in small-scale retail investors buying “safe haven” assets, the coin maker said.

At the same time, the Royal Mint’s total payouts to customers selling back their bullion surged by nearly half after gold prices hit an all-time high last year. Stuart O’reilly, an analyst at the Royal Mint, said: “The potential for central bank rate cuts in 2024 is boosting the gold and precious metals market, as the prospect of lower rates boosts demand for non-yielding assets.”

Expectations of rate cuts from the Federal Reserve in 2024, alongside the weakening of the US dollar “could turbo-charge gold beyond recent market highs”, Mr O’reilly added.

A record number of elections around the world in 2024 is likely to bring further geopolitical turbulence, he added.

Markets were rocked by uncertainty over the outlook for global interest rates, as well as the wars in Ukraine and between Israel and Hamas. Record high gold prices triggered a 19pc rise in the number of customers selling their gold investments back to the Royal Mint last year, with total payouts surging by 46pc compared to 2022.

Those buying were focused on more affordable options. The Mint’s gold sovereign, gold Britannia coin and one gram gold bar, which is about a 28th of the weight of a typical 1oz bar, were the most popular, allowing customers to invest in physical gold from around £75.

Sales of the Royal Mint’s bullion coins are exempt from capital gains tax for UK residents because of their legal status as British currency.