Gold jewellery
A rise in the price of gold in the UK is leading to larger amounts of gold and silver items being scrapped. Image: Syed Sajidul Islam via Commons Wikimedia.

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The gold fix has been climbing since May but peaked at £1176 on Wednesday July 31, representing a 2.4% rise on the previous week. The all-time high of £1182 was set in September 2011.

The silver spot rate reached £13.51 per ounce on July 31, the highest of 2019 but still shy of record levels.

Precious metals are a traditional safe haven at times of economic uncertainty. This week’s peak followed the increasing possibility of a no-deal Brexit and the announcement that the US Federal Reserve was cutting interest rates.

Brighton-based precious metals dealer Michael Bloomstein reported larger amounts of gold and silver coming in due to the increasing scrap values. At the start of the year he predicted greater movement in the gold price after the relatively consistent levels across 2018.

“Brexit is having a considerable bearing on the escalating gold price,” he said. “The prospect of a no-deal divorce has caused confusion and anxiety and both of these elements are powerful propellants to a higher gold price.”

He also pointed out that the ratio between the prices of gold and silver was growing ever wider. “For the past 20 years you would normally have needed about 60 ounces of silver to buy one ounce of gold. Now you would need 85 ounces of silver to buy one ounce of gold.”

In terms of the long-term factors affecting the direction of travel for silver, he pointed to lesser demand for silver items that require polishing and members of the public now being less inclined to wear their grandparents jewellery.