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Dublin firm sees Brexit gold rush from Northern Ireland

Edmund Heaphy
Ireland Correspondent
Merrion Vaults said that its clients believed investing in gold was the “safest option”. Pic: Reuters

A Dublin gold firm has seen a dramatic surge in Northern Ireland-based clients in recent months, as fears of a no-deal Brexit grow.

The number of clients from Northern Ireland purchasing or storing gold has jumped by 70%, said Merrion Vaults, the gold-storage specialist.

“In the five years our vault has been selling and storing gold, we have never seen such a demand as this current rush,” said co-founder Seamus Fahy in a statement on Monday.

He noted that the clients looking to move gold out of the UK and into Ireland include investors, pension managers and small businesses, among others, and that the rush had begun long before recent no-deal Brexit warnings from the Bank of England.

“They believe that, until there is stability in the UK economy, investing in gold is the safest option,” he explained.

Investing in gold is considered as a good way to hedge against inflation, which could soar if Britain crashes out of the European Union without a deal and the value of sterling collapses.

In November, Goldcore, another Dublin-based firm, announced that it had introduced institutional-grade gold vaults, saying it expected the Irish capital to rival London as a preferred gold storage location.

“We expect demand in Dublin to exceed that of London sometime in 2019 as UK and Irish clients seek to spread their holdings across jurisdictions,” GoldCore CEO Stephen Flood said. The firm has opened a secure storage facility in the city.

Geopolitical risks including Brexit and burgeoning trade wars prompted the expansion of GoldCore’s offerings. Though investors have generally been more interested in gold following Donald Trump’s election victory, October and November saw the commodity’s first monthly gains since March.

The wide expectation that the Federal Reserve would continue increasing interest rates is thought to have dented demand for gold, which does not pay interest. But recent remarks by Fed chairman Jerome Powell, who suggested that the central bank was rethinking its strategy, suggest that the commodity could be poised for a rally.

Goldmach Sachs said last week that gold would benefit from increased demand if US economic growth slowed.

But a 1 November report from JPMorgan Chase advised that, to cushion themselves from geopolitical impacts, investors should actually avoid traditional safe havens such as gold. Instead, the bank advised, they should consider taking out stakes in the dollar or in indexes that measure stock market volatility.

Gold investors were startled earlier this year when central banks in Poland and Hungary — two large eastern European economies — sought to diversify their holdings by purchasing the commodity. Central banks around the world now hold about £990bn ($1.3trn) in gold reserves, according to the IMF.

Though that is well below all-time peak levels, central banks are expected to increase their purchases of the commodity this year for the first time since 2013.