UK Edition
Brexit gold rush to generate £10m in a single day for online bullion dealer
A gold dealer has predicted that a decision to leave the European Union would prompt an online gold rush, generating sales of around £10m in a single day for his company, as investors seek to protect their wealth.
BullionByPost, Britain's biggest online gold dealer, is forecasting its biggest ever trading day if voters decide on a Brexit. "We have a number of large clients waiting to place orders," claimed founder Rob Halliday-Stein. "Everyone is waiting for the referendum outcome.
"Gold rises on volatility and we've never had a day as volatile as a Brexit day in the gold price market."
BullionByPost has already seen increased activity in the run up to the vote. Sales in the first two weeks of June are up 54pc on the same period last month.
The £10m predicted revenue surge would be a significant boost to the £125m-turnover business.
The price of gold tends to rise when the value of sterling falls and analysts have indicated that Britain's decision to leave the EU is likely to cause sterling to drop.
According to Paul Hollingsworth, UK economist at Capital Economics, the fall could be between 10pc and 20pc; other analysts have been more conservative, expecting a 10pc to 15pc slump.
Over the past month, the price of gold has crept up to hit £903.80 an ounce, up from £886.87 on this day in May. Over the same period, sterling has slumped against the dollar.
Uncertainty in Europe typically leads to a surge in the price of gold. In 2011, the euro crisis drove the gold price to an all-time high of $1,603.40 an ounce (£1,133.70).
Unsurprisingly, in a poll of more than 5,000 of its customers, BullionByPost found that 78pc were in favour of Brexit.
In the June edition of Gold Investor, the former chief manager of reserves at the Bank of England, John Nugee, said that "whatever the outcome [of the referendum], an investment in gold is unlikely to underperform and in some scenarios might outperform strongly."
In the same magazine, Mervyn King, former governor of the Bank of England, noted that gold has been seen as a safe way to hold wealth in times of crisis. "When governments rise and fall, then gold is a means of payment that everyone is prepared to accept," he said.
A 'Leave' vote could result in a 5pc jump in the price of gold, he claimed. "It could even be a 15pc move on the day followed by at least a week of volatility. Many clients already hold 5pc of their wealth in gold and they're looking to move that to 10pc."
Even if Britain votes to remain in the EU, BullionByPost is still expecting its busiest single day for sales since the company was founded in 2008.
"All volatility drives demand," Mr Halliday-Stein claimed. "We make money on each trade so we're not affected adversely by a price fall.
"Some of our busiest days have been on price drops."
If Britain votes to leave, BullionByPost will generate £30m in sales in July. A remain vote will generate £20m that month.
Despite the short-term boost that a Brexit would bring to the business, Mr Halliday-Stein said he was "undecided" on his personal vote.
"We're launching sites in Spain and France and a lot of my staff are from the EU," he said. "As an entrepreneur, there is a strong argument to stay in Europe but at heart, I think the EU is fundamentally undemocratic and I'm uncomfortable with the concept of Fortress Europe."
A new poll of 650 Telegraph-reading small and medium-sized business owners, as part of our Entrepreneurial Britain survey, found "Remain" in the lead with 37pc, "Leave" at 30pc and 33pc still undecided.
BullionByPost specialises in selling bullion and gold coins. The average order is worth between £2,000 and £3,000.