The cost of gold bars in pounds sterling last week approached a record.

_{The dynamics of the price of gold in pounds per troy ounce}

When the pound tumbled after UK Treasury Secretary Kwazi Kwarteng unveiled a plan to boost the national economy, some Britons rushed to a recently lost „safe haven” asset: gold.

As the British currency fell against the dollar to a record low of 1.0350 early Monday, gold prices in pounds rose to near-record levels. Normally this would encourage selling and deter buyers, but this time the turmoil in the British bond and currency markets has increased the precious metal’s appeal.

„Purchases have grown exponentially,” said Ash Kundra, manager of gold coin dealer J Blundell & Sons in London’s historic Hatton Garden jewelry district. „I’m running out of coins, I’m also running out of bars.”

The push for gold in the UK contrasts with bearish sentiment in the precious metals market as dollar-denominated gold prices are down more than 20% from their peak in March as the Federal Reserve’s aggressive monetary tightening makes the interest-free asset less attractive. However, precious metals’ status as a hedge against inflation and currency depreciation keeps demand high from retail investors.

_{USD gold price chart}

While the pound has bounced back over the past few days after the BoE was forced to intervene to prevent a bond market crash, the biggest unfunded tax cut announced in the UK in half a century continues to fuel inflation worries and put pressure on British assets.

British brokerage firm BullionVault reported a twofold increase in the number of accounts opened by retail investors for the purchase of precious metals.

“We are seeing a lot of buying interest from the UK,” said Adrian Ash, head of research at BullionVault. „The interest rate and inflation crisis is global, but the gold signals that the UK is right in the face of a storm.”

However, increased British demand is unlikely to have a strong impact on world prices. British consumers bought 15.5 tons of bars and coins last year, just over 1% of the world’s total, according to the World Gold Council.

Even before the government’s fiscal bombshell, fears of soaring energy bills, food inflation and higher mortgage rates were driving more Britons to buy gold.

“We expect that in the coming months we will continue to see an upward trend in the number of people using gold as collateral for a loan while this period of extreme uncertainty exists,” said Jim Tannahill, managing director of the London pawnshop. Suttons and Robertsons.

Over the past few weeks, he has noticed a 40% increase in the number of clients who want to take out loans secured by their gold investments.

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