Largest Increase In Gold Prices Since 1980

A new report from the World Gold Council shows that record investment in the first half of 2016 pushed the price of (US) gold by 25% in the first half of the year, the biggest price rise since 1980.

And far from being a ‘one-off rally’ at the start of the year, as some analysts originally predicted, global demand for the precious metal shows no signs of slowing.

“The growth for quarters one and two was actually 16% higher than the first half of 2009 - the time of the recent financial crisis,” says senior bullion dealer, Oliver Temple at Gold Investments.

Factors

“As we have been reporting recently ourselves, there are numbers  of factors that are increasing demand. In the UK, we still not know how much of a fallout there will be from Brexit. This uncertainty will be having an effect on investor confidence and making gold more appealing.

"New investors  in particular may well be attracted to gold because of the possible introduction of negative interest rates on bank accounts. Sovereign and Britannia coins are popular, for instance, because they are free from Capital Gains Tax.

“Gold in the US did drop slightly this week because of much stronger employment data but we believe if there is an interest rate rise there, it will pull more investors to back towards the precious metal. There is also the US presidential election,” says Temple. “Italy’s weak banks are posing a risk to the Eurozone which could also be having a bearing on current gold prices.”