You are here: Home - Investing - Experienced Investor - News -

Should I sell my gold post-Brexit and take the profit?

Written by:
Demand for gold rose in the run-up to the EU referendum and prices soared as the Brexit result came in. But what should gold investors do now?

One of the big winners of the UK’s decision to leave the EU has been gold.

Market turbulence following the Brexit vote has seen nervous investors flock to this relatively safe haven asset class.

As the results were coming in early Friday morning, the gold price surged 22% against the pound to £1,000 per ounce, its fastest move ever.

Customers of BullionVault, the online bullion exchange, had traded over £10m by 6.30 on Friday and went on to set a one-day bullion record of £30m by midnight.

So should investors cash in and take some profit or does the gold price have further to go?

On Tuesday, the gold price fell 2%, due to profit taking largely from institutions, according to Josh Saul, founder of The Pure Gold Company.

BullionVault chief executive Paul Tustain said clients have been net sellers of gold since the Brexit vote.

“This is unusual and counterintuitive, because people tend to think you only ever buy gold because of a crisis, and that retail investors are the tail-end-charlies who always get burned when markets get volatile, buying late at the highest prices.

“This is absolutely not the case at BullionVault. Our users bought a lot of gold into this crisis, and some are selling to bank substantial profits from Friday’s shock.”

However, continued uncertainty as the UK negotiates its exit from the EU means the demand for safe-haven gold could continue apace and the gold price could increase further.

“If the Brexit shock develops anything like the global financial crisis did, gold’s underlying direction could keep rising for another five years,” says Adrian Ash, head of research at BullionVault.

Banks including UBS are implying that gold forecasts are at an all-time high, with some suggesting the gold price could jump by another 30% by the end of the year.

Then it comes down to timing the markets, which is tricky and comes with a high risk of getting it wrong.

“If you plan on selling to buy back into the market you may end up paying more than you sold for,” says Saul.

“If you are simply selling to take profit you may get more if you wait a little longer.”

Notwithstanding Brexit, there are other contributors to market uncertainty, which could add to the allure of gold, such as the slowdown in China and indecision over interest rates in the US.

“Gold is viewed as more of a long term investment and a means of protection as opposed to a short term opportunity to make money,” says Saul.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Kids taking a gap year? Top money tips to help them on their way

If your children are thinking of taking a gap year it’s essential they’re prepared. Here are some top tips for...