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How Will Brexit Affect Gold Investments in PA?

Will Brexit affect gold investments in PA?Voters in the United Kingdom made history June 23 by voting to leave the European Union.

The “Brexit” referendum – as it’s come to be known – could have major implications for the economy in both Great Britain and around the world.

The days following the vote have already seen an equity sell-off that erased $3 trillion in stock market value, considered the worst two-day paper loss in history. Some experts worry the vote will lead to even greater calamity, using words like “stagflation” and “recession.”

So how will Brexit affect gold investments in PA? It depends on who you ask.

In the days following the vote, the price of gold jumped from $1,260 per ounce to $1,320 an ounce as of this writing.

Gold dealers in New York told Reuters they were experiencing their busiest day in months on the day after the Brexit vote.

“We received non-stop phone calls of people trying to sell their gold, their bullion, their jewelry,” said Edward Kay, president of Buyers New York. “We had a whole full waiting room of people.”

Dealers around the world reported a surge in demand, but it may have been short-lived.

“The first news on Friday led to good demand, but people are giving it a second thought now,” Wolfgang Wrzesniok-Rossbach, chief executive of German bullion dealer Degussa told Reuters. “People are uncertain whether Brexit will actually take place in the short term… the stock markets have come off, but we’re not talking about a meltdown. I think that’s why people didn’t rush to buy more gold.”

In India and China, the world’s two biggest gold markets, high prices may have been scaring away some gold buyers.

“Demand is very dull. Consumers think prices will not be sustained at higher levels,” Mukesh Kothari, director at bullion dealer RiddiSiddhi Bullions in Mumbai, said in an interview with Reuters.

In the days before the vote, the CPM Group said that gold prices would decline over the summer and then return to or surpass the $1,300 per ounce level by the end of the year.

According to MarketWatch, CPM listed a number of other factors that could affect the price of gold this year, including a “robust U.S. employment report” for the month of June – due out July 8 – and the fact that the summer months are typically a weak period for demand from gold fabricators and investors.

In the long term, CPM expects a revival in gold investment demand and prices due to concerns about a recession in the United States.

And let’s not forget Decision 2016. Gold prices tend to fluctuate when the White House is up for grabs, dipping in the weeks before people go to the polls and rising in the wake of the election.

At Doylestown Gold Exchange, one thing we tell customers again and again is that gold investments in PA is a way to preserve wealth, rather than to make money.

We’ve been providing precious metal consultations for more than 20 years. If you’re looking to invest in gold – or sell it – contact us today to learn more. And be sure to visit our website, where we keep track of the price of gold, silver, platinum and palladium 24 hours a day.

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