There has been spike in demand for gold bars and coins, following the Bank of England's decision to cut the UK benchmark interest rate, as part of a post-Brexit vote move designed to support the economy.
On 4 August, the central bank lowered the interest rate from 0.50% – a level it had been at since March 2009 – by 25 basis points to a record low 0.25%. With the prospect of diminishing returns on cash savings, the Royal Mint registered a 25% increase in transactions on its gold bullion website that week, as consumers turned to the yellow metal.
It also logged a 50% increase in sales of gold bars and coins, compared with the previous week, according to data released on Friday (12 August).
Comex gold futures have rocketed 25% over the course of 2016, with safe-haven calls from investors driving prices upwards. However, a continued rally upwards is by no means guaranteed, especially if the US Federal Reserve raises interest rates, according to City analysts.
Sucden Financial analysts expect gold to range between $1,210 and $1,425 an ounce in the third quarter. In a note to clients, they claimed: "The macro environment remained supportive in the second quarter as expected – elevated macro and political uncertainty boosted safe-haven demand, especially after the Brexit shock.
"Given the strong conviction in holding gold as a hedge against tail risk, it should remain supported in the third quarter, especially because a cautious Fed could prolong the decline in US real interest rates."
FXTM analyst Lukman Otunuga said: "Although risk aversion and ongoing concerns over the global economy have buoyed gold, the sharply appreciating dollar continues to temper prices. From a technical standpoint on the daily timeframe, this yellow metal does fulfil the prerequisites of a bullish trend as there have been higher highs and higher lows."
Laith Khalaf, senior analyst at Hargreaves Landown, cautioned: "It's worth pointing out gold is by no means a one way bet - in 2011 it was trading at above $1,800 an ounce. It's an insurance policy for the rest of your investments and as such should make up no more than 5-10% of your portfolio."