Gold rush in London as dealers scramble

After staying up all night in London to watch the European Union referendum results, and mourning the outcome, Lauro Franzese decided to make some money.
“I thought I might as well get something out of it,” the 61-year-old army veteran said as he walked the streets of the city’s Hatton Gardens jewelry district. “So I sold gold today — at about 30 percent profit.”
Franzese, who unloaded a ring he’d owned for a decade as well as several coins, took advantage of the biggest ever one-day gain for gold that’s denominated in pounds. As the British currency sank to the lowest level in three decades, gold rose a record 14 percent to 966.14 pounds.
In a shop next to the Savoy Hotel, dealers said they had never seen anything like it. Some Londoners are rushing to sell, many more to buy. “Anybody who’s got a spare pound to put into gold is doing it,” said Michael Cooper, commercial director of ATS Bullion Ltd. “We’re doing 10 times the business we normally do.”
In the fallout from Britain’s decision to leave the European Union, the unexpected resignation of the prime minister and uncertainty over the country’s economic future, investors looked for safety and found it in gold — a precious metal long prized as a universal store of value immune to the whims of political leaders. The Royal Mint, which makes circulation and collector coins, and specialist online brokers reported surges in new customers. The Mint saw a “significant spike” in buying, with account openings up 200 percent since Thursday.
“We’re going to be inundated,” said Cooper of ATS, which traces its history to the 1600s. “We’re buying pretty much everything we can from the refiners. They’re not going to get enough in to fill all the orders.”
In London’s spot gold market, the biggest in the world, prices jumped as much as 8.1 percent, the most since the height of the global financial crisis in 2008. The metal later pared gains, trading near a two-year high of $1,316 an ounce.
CoinInvest.com said a record number of UK visitors flooded the website around 5:30 a.m. Friday. Gold Britannia coins, which bear the image of the armed Roman goddess, and Sovereigns were the best sellers, according to Daniel Marburger, a director at the Frankfurt-based retailer.
BullionVault, an online trading and vaulting service, saw its busiest day ever. Customers exchanged 25.8 million pounds ($32.2 million) in metal by 2 p.m. on Friday, more than two weeks worth of average trading in 2015, according to a statement from Adrian Ash, head of research at the London-based firm.

Some people, like Franzese, took advantage of the jump in prices. Baird & Co., a precious-metals dealer in London, transferred staff from other parts of the company to answer phones and meet demand.
“People in Britain who bought in January are now seeing prices 200 pounds above where they bought,” said Tony Dobra, an executive director at the firm. “They’re cashing in.”
No such luck for Ruth Smith, a 48-year-old financial services professional.
“The size of my diamond engagement ring has got smaller now thanks to Brexit” and the pound’s sharp decline in value, she said. “I had been waiting for two months to cash in on my investments and replace my current fake ring that cost 4 pounds with a proper three carat ring after the vote — but now all our plans have gone down the drain with the dollar-price effect.”

Source: Arab News