Atkinsons Bullion & Coins
Back to August 2019
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The last couple of weeks have seen gold smash through the ceiling, bypassing its highest ever price and skyrocketing upwards. The early hours of this morning saw the price break £1,249 – so what is the reason for these heights, and will they hold?

Breaking Records

The all-time UK highest gold price of £1,182 set in August 2011, was smashed in the late hours of August 1st, when it shot up by over 2% in less than 5 hours – and it hasn’t stopped there. This month has seen a massive upwards change of over 7%.

Silver also looks to be joining the party, moving up in sympathy – with a monthly high of £14.20, and an upwards change of over 5%.

Trade Troubles & the Plummeting Pound

Gold’s previous all-time peak was set in August 2011 due to the fall of the stock markets, as the US saw their credit rating downgraded. The reasons for these current new historical highs look to be due to a number of factors, all coming together to create gold’s ‘perfect storm’.

The Pound has significantly weakened as markets become increasingly concerned about the possibility of a No-Deal or Hard Brexit since the appointment of Boris Johnson as Prime Minister. This scenario looks more and more likely to become a real possibility – with some reports suggesting we may see the pound fall even further if this comes to pass.

The global economic outlook seems to be showing disturbing signs, as we have seen interest rates cut in the US and Europe. Plunging interest rates and negative yielding bonds means gold’s attraction only deepens for investors. Uncertainty over the US-China trade war also does not help matters, with Donald Trump escalating his dispute with Beijing, as well as the ongoing tensions with the Middle East.

Safe Haven

Gold pays no income, yet this incorruptible metal has been used to store wealth, in every culture, throughout the whole of human history - and it’s not stopping now. At the moment, all eyes are on gold, and interest in our favourite precious metal has never been as high as it is now. It’s no surprise that we at Atkinsons have been completely run off our feet!

As the saying goes - it never rains but it pours! With the plunging pound and falling interest rates, gold looks increasingly attractive as a safe haven asset. Where will it go from here?

For the moment, gold is doing exactly what investors want it to do: go up when markets fall. The best we can do is sit back, stay dry under our umbrella, and remember – it’s always good to know which way the wind blows.

Keep a close eye on the news.

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This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.

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2 Comment(s)

By
Both Gold and the Dollar are rising. This is very significant as it signals wider problems in fiat monetary system.
By
Tracking the gold price in GBP is not necessarily useful since the Pound has suffered such a battering on the exchange rate over the last few years.

For those already invested, Gold has of course been effective in preserving purchasing power against this.

If we look at the Gold price in USD, then at $1,511 it's still 21% below it's all time high of $1,917.

With a long overdue US recession likely to arrive over the next couple of years I think we'll see Gold take out it's previous high to head north of $2,000, into the region of $2,500 over the next 3-5 years or so. It's not going to sustain the rapid rise we've seen in the last few months, but the price could well be going up 10% a year as money attempts to exit over-valued stock markets and negative yielding bonds.

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