First drop in gold price since Brexit ‘likely to spur jewellery demand’
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The price of gold has fallen for the first time since the Brexit announcement in June, dropping 3% to $1,300 per ounce on 4 October.
Consumers and investors may see the price decline as a good buying opportunity, according to the latest report from the World Gold Council (WGC). It cited the third quarter of 2015 when a 7% decline in gold price triggered a sharp increase in demand for jewellery and bars and coins.
The decline seems to have been driven by speculation of a scaling back in the European Central Bank’s asset purchase programme combined with rising expectations of a US rate hike in December, according to the WGC.
A statement from the council said: “Some data already point to an uptick in consumer interest. The top five countries where consumers were searching online for gold following the price drop were in the Middle East, with the UAE being number one.
“Anecdotal evidence suggests that consumers had been holding off purchases in previous months, so this may well trigger an increase in demand.”
