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Price of gold reaches 7 year high

Over the past few months, the price of gold has been increasing, so much so, it’s now at a 7-year high. With the coronavirus causing havoc in the stock market, the price is expected to increase even more over the next few weeks and months. While this might seem like a negative for those wishing to buy gold, there’s no better time than now for anyone wishing to sell it.

7 year high

The price of gold initially began increasing due to the US and China’s trade battle which has been ongoing since 2018. Now, with the coronavirus outbreak, global stocks are expected to plunge further.

A safe haven during financial stress

So why exactly does the price of gold spike during stock market struggles? Gold has always traditionally been viewed as a ‘safe haven during financial stress’ for various reasons, which in turn, boosts the price.

The cycle goes like this:

  1. Value

Unlike printed paper money, the value of gold is not impacted by interest rate decisions made by a government. Historically, gold has maintained its value over the years, therefore it’s almost like a form of insurance against economic downfalls.

  1. A hedge fund

With the value remaining unaffected, gold essentially becomes a popular hedge fund investment. A hedge fund is an alternative investment that aims to protect investment portfolios from market uncertainty. So, when stocks crash, investors tend to sell their stocks and buy gold instead for safety.

  1. Demand

As a result of gold becoming a hedge fund, the demand for it increases too. The Royal Mint, a government-owned mint that produces coins for the UK, reported a 484 per cent increase in demand for its gold bars and coins. Ultimately, this leads to gold prices increasing worldwide.

Selling gold

The price increase isn’t necessarily a bad thing, especially for anyone who is looking to sell their gold. Make the most of this market uncertainty with your gold. When stock markets crash, they do tend to recover at some point, therefore the price should decrease again too, so now is your time to earn some extra cash.

As one of Scotland’s oldest established jewellery buyers, we can give you advice on selling your gold and offer instant settlement. As well as selling a fantastic range of new and modern jewellery, we also specialise in buying vintage and antique jewellery.

Come in and visit us to make the most out of this time with your gold.

You can visit us in Glasgow at 41 Argyle Arcade and 4 Argyle Arcade, or in Aberdeen at 88 Union Street.