According to the Royal Mint, investors flocked in record numbers to gold in 2023 due to global economic turmoil that triggered a flight for safety.
The number of people purchasing gold bars and coins has increased by 7pc in the last year, exceeding the peak of the lockdown investment boom of 2020.
The British coin manufacturer said that this was due to an increase in small retail investors purchasing “safe haven assets”.
The Royal Mint increased its total payouts for customers who sold back their gold by almost half, after prices reached an all-time high last year.
Stuart O’Reilly is an analyst with The Royal Mint. He said that gold prices may reach new records this year, ahead of the central bank’s interest rate reductions, which will make investments like bonds or savings accounts less attractive.
Mr O’Reilly stated: “The prospect of central bank rate reductions in 2024 boosts the demand for non-yielding investments, as lower rates are expected.”
The Federal Reserve’s expectation of rate cuts in 2024 along with the weakened US dollar “could boost gold prices beyond recent highs”, said Mr O’Reilly.
He added that a record number of world elections in 2024 will likely bring more geopolitical turmoil.
Mr O’Reilly stated that the rise in precious metals prices was largely due to geopolitical and economic uncertainty as well as central bank gold purchases.
The markets were shook by the uncertainty surrounding the future of global interest rates as well as wars between Israel and Hamas and in Ukraine.
Last year, the record high gold price prompted a 19pc increase in customers returning their gold investments to Royal Mint. Total payouts increased by 46pc when compared to 2022.
The buyers were looking for more affordable products. In 2023, more than three-quarters of investors in gold bars and coins bought “fractional products”, which are smaller than traditional sizes.
Popular items included the gold Britannia, the gold sovereign and the 1g bar of gold, which is 28ths of an ounce.
Customers could now invest in gold starting at around £75 . DigiGold, the online platform of The Royal Mint, offers investments as low as £25.
Andrew Dickey said, “We’ve continued to develop our fractional products, allowing investment at the entry level up to our six figure investment options.” This has enabled more investors to buy gold with us.”
The legal status of the Royal Mint bullion coin as British currency exempts UK residents from paying capital gains tax on purchases of these coins.
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