Early indications suggest that the largest fall in the bullion price for 30 years on April 15-16 has not affected trade too dramatically, as the drop off was largely seen as a market correction after three years of historically high prices.
Dealers reported little impact so far despite the 12% fall in gold and the 13.5% fall in silver recorded before the market briefly rallied at the end of last week. This is possibly because scrap values for many routine pieces of gold jewellery and lower-quality silver remain above their current worth as objects.
Brighton-based precious metals dealer Michael Bloomstein said that he was still taking in roughly the same volume of items destined for melt as before, including objects such as heavy jewellery, Victorian and 20th century tea services, flatware, salvers, holloware and other pieces of ordinary domestic silver.
Investment Gold
He also reported that there was still strong demand for investment gold (such as sovereigns and other coins) due to the continuing economic uncertainty and low interest rates offered by banks.
The fall in the price of precious metals on international markets has widely been attributed to the announcement that Cyprus's plan to sell most of its gold reserves might prompt other weak eurozone economies with much larger reserves, such as Italy, Spain and Portugal, to follow suit.
Such a vast supply of gold coming onto the market would be bound to depress prices significantly.
Other contributing factors are thought to be the belief that the US Federal Reserve will soon end its quantitative easing programme and the recent imposition of an import tax in India, the world's largest buyer of gold.
There has also been a slight decline in the rate of China's economic growth that saw drop-offs in wider commodity and share markets.
