Investors flocked to gold in record numbers in 2023 as global economic turbulence triggered a flight to safety, according to the Royal Mint.
The number of people buying gold and precious metal bars and coins jumped by 7pc year-on-year, surpassing the highs of the 2020 lockdown investing boom.
The British coin maker said this was due to a jump in small-scale retail investors buying “safe haven” assets.
At the same time, The Royal Mint’s total payouts to customers selling back their bullion surged by nearly half after gold prices hit an all-time high last year.
Stuart O’Reilly, an analyst at The Royal Mint, said gold prices could soar to new record levels this year ahead of central bank interest rate cuts, which will reduce the appeal of investments such as bonds, or savings accounts.
Mr O’Reilly said: “The potential for central bank rate cuts in 2024 is boosting the gold and precious metals market, as the prospect of lower rates boosts demand for non-yielding assets.”
Expectations of rate cuts from the Federal Reserve in 2024, alongside the weakening of the US dollar, “could turbocharge gold beyond recent market highs”, Mr O’Reilly said.
A record number of elections around the world in 2024 is likely to bring further geopolitical turbulence, he added.
Geopolitical and economic uncertainty, alongside central bank gold buying, was key in pushing up precious metal prices last year, Mr O’Reilly said.
Markets were rocked by uncertainty over the outlook for global interest rates, as well as the wars in Ukraine and between Israel and Hamas.
Record high gold prices triggered a 19pc rise in the number of customers selling their gold investments back to The Royal Mint last year, with total payouts surging by 46pc compared to 2022.
Those buying were focused on more affordable options. More than three quarters of gold bar and coin investors bought “fractional” products in 2023, which are smaller than the traditional size.
The Mint’s gold Sovereign, gold Britannia coin and 1g gold bar, which is a 28th of the weight of a typical one ounce bar, were the most popular.
These products meant customers could invest in physical gold from around £75. The Royal Mint’s online platform, DigiGold, also offers investments starting from £25.
Andrew Dickey, The Royal Mint’s director of precious metals, said: “We have continued the development of our smaller, fractional products allowing entry level investment right up to our six-figure investment options. This has allowed more investors to purchase gold with us.”
Sales of The Royal Mint’s bullion coins are exempt from capital gains tax for UK residents because of their legal status as British currency.
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