Message: OT: Record Bullion Sales
Gold price falls fuel 'record' bullion sales
The UK’s biggest internet gold and silver dealer has predicted rising sales even as the gold price slumped to a three-year low.
By Emma Rowley
3:45PM BST 29 Jun 2013
BullionByPost said its sales hit £87m in the year to April, presenting a rise of 58pc on the previous year. Pre-tax profits are expected to be in the region of £2m, up from £1.5m a year earlier.
Management forecasts turnover of more than £120m for the company’s next financial year. The prediction came despite a continued slide in the gold price in recent months, culminating in the “safe haven” metal dropping to a low under $1,200 an ounce on Friday.
The price has been hit by a widespread sell-off among institutional investors, who have increasingly turned to the yields offered by equities. The Federal Reserve’s recent timetabling of how it will unwind its vast quantitative easing (QE) programme - which had increased the appeal of gold as an inflation hedge - has also hurt demand.
However, Rob Halliday-Stein, the founder of BullionByPost, said the plunge in the price had increased enthusiasm for gold among his customers, describing Friday as a “record” day with over £1m sales.
“For every seller, there’s a buyer,” he said. “The sellers tend to be big and fast and the buyers smaller and slower. The reason they are buying has not changed - it is because they are worried about the medium to long term outlook for the economy, and QE.”
He set up the internet delivery business in 2008 after he found it difficult to buy physical gold after inheriting money following the death of his mother.
His aim was to target small investors who were not the focus of established bullion dealers. Today the business, which buys bullion from traditional dealers and delivers it to retail investors the next day, is a distributor of Royal Mint coins and as well as gold and silver bullion bars.
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