Friday 12 August 2016 2:26 pm

It's official: The Royal Mint says there's been a major gold rush since the Bank of England's interest rate cut

There's been a gold rush on since the Bank of England's interest rate cut, it turns out – after the Royal Mint confirmed a huge uptick in the number of people buying gold.

Chris Howard, the Royal Mint's director of bullion said today that its bullion trading site had experienced a 250 per cent increase in visitor numbers on 4 August compared with the previous day.

Read more: City A.M. Unregulated – is now the time to invest in gold?

“Comparisons of week commencing 1 August with the previous week reveal a 25 per cent increase in transactions, leading to an overall revenue increase of nearly 50 per cent for The Royal Mint’s bullion trading division," he said. 

"Looking at individual products, the organisation’s ‘Signature Gold’ saw a 140 per cent sales increase – the product enables investors to benefit from economies of scale by purchasing fractions of large gold bars from as little as £20.

"Gold bullion coin sales also benefitted, seeing a leap of 50 per cent in the same period. Many investors chose to buy tubes of coins, making them eligible for storing in The Royal Mint’s on-site precious metal storage facility, ‘The Vault’.”

The Brexit vote and higher-than-usual levels of volatility have caused investors to flee towards so-called safe havens such as gold in recent months – pushing its price up by 25 per cent in the year so far, from $1,060 to $1,330.

The fall of the pound has made the price rise even bigger – in sterling terms, it's up 45 per cent. Lucky Michael Phelps…

"Gold has benefited from the falling yield on other safe haven assets, in particular cash and bonds," said Laith Khalaf, senior analyst at Hargreaves Lansdown.  

"The ongoing clatter of the printing presses in central banks across the UK, Japan and Europe also helps give gold a leg up, as it is a hedge against currency devaluation.

"Gold isn’t a one way bet however, indeed in 2011 it traded above $1,800 an ounce, and it now sits around 25 per cent lower. Gold is an insurance policy against things going wrong, and as such it should make up only around five to 10 per cent of a portfolio."