Last updated: August 19, 2013 4:56 pm
UK gold exports surge tenfold this year
The exports – worth €29bn and equivalent to nearly 30 per cent of global annual mine production – underscore the scale of the shift in gold ownership taking place as western investors lose their enthusiasm for the metal.
The UK has no commercial-scale gold mines, but London is the centre of the global gold market, with bankers estimating that some 10,000 tonnes are held in the city’s vaults, including at the Bank of England, largely by investors and central banks.
The price fall has stimulated a huge increase in demand in Asia, particularly China, whose gold association reported a 54 per cent increase in demand in the first half of the year.
Matthew Turner, precious metals analyst at Macquarie, said the rise in gold exports had closely tracked outflows of the metal from exchange-traded funds, a popular investment product which helped to popularise gold when they were launched a decade ago.
The large-scale shift of gold out of western trading hubs towards Asia has led to a spike in business for traders and refiners.
The London Bullion Market Association said that the daily cleared trading volume on the London market by its members hit a 12-year high of 900 tonnes – worth $39bn – in June on the back of “strong physical demand particularly from China and India”.
“The Swiss are running three or four shifts to keep the refineries going non-stop. They’re throwing bodies at it,” said one senior gold trader.
Gold prices touched a two-month high of $1,384 a troy ounce on Monday amid hopes that the recent wave of investor selling was beginning to slow.
Copyright The Financial Times Limited 2013
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