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Record Gold Price in GBP - A Great Time to Sell and also To Buy?

Tuesday, August 6, 2019

Monday 5th August saw the gold price in GBP reach its highest ever level. Record levels were also achieved for gold priced in Chinese Yuan, Indian Rupees and the Canadian and Australian Dollars.

Exchange Rates Matter

When studying the gold price it is essential to look at the exchange rates between the local currency and USD. Gold is traded around the world in USD and the exchange rates between USD and local currencies therefore determine the local gold price.

With the Pound currently trading around $1.21 USD we are experiencing some of the lowest rates in recent times with some forecasters predicting parity between the Pound and US Dollar if a No Deal Brexit produces further pressure on our currency in the weeks and months ahead.

This would result in higher gold prices for us in GBP but any sign of flexibility from the EU in re-negotiating our Brexit arrangements could see a strengthening of the Pound against the Dollar and a dip in Gold prices.

Record Prices in GBP....But

Recent record Gold prices in GBP and other currencies may well be grabbing headlines amid claims of assets being moved to ‘safe haven’ options but the underlying global price in USD is nowhere near record levels. At the current level of around $1465 per ounce the price is well over $400 per ounce below the record levels of 2011.

Looking Ahead

Financial authorities in the US and in the EU are looking to lower interest rates and the EU are apparently actively considering another money printing round of Quantitative Easing to head off growing fears of recession. Both of these courses of action have been associated with increases in the Gold price in the recent past and may well offer supporting arguments for future rises.

The increasing levels of Global unrest and uncertainty including the developing situation relating to US/Chinese trade add the likelihood of increased levels of ‘safe haven’ demand for Gold and the resulting price rise.

Many hedge fund managers and investment gurus are once again extolling the virtues of investing in Gold and such sentiment usually helps to stoke the Gold price. Whilst reaching record price levels in GBP may discourage some buyers, the fact remains that in Global terms we are $400 plus per ounce below all-time record prices.

If you are looking to invest in gold, there are many options available, depending on your budget, catering for beginner and seasoned investors alike. Products such as our Best Value 1oz Gold Bar are great for first time investors but we also have a wide range of Larger Gold Bars available for bigger portfolios.

If you are looking to take advantage of the record breaking GBP Gold Price and sell some or all of your portfolio, then you need to visit our Selling Page to help you work out what your gold is worth.