(Kitco News) – 2023 was undoubtedly a record year for the gold market; not only did prices hit all-time highs, but some major mints are saying they saw record bullion demand last year.
Wednesday, The British Mint said that a record number of customers invested in precious metals products in 2023, increasing 7% compared to 2022. The Mint said that according to their customers, the need for safe-haven demand was a significant driver behind bullion purchases last year.
“Many global investors continue to move into precious metals investments to weather volatile financial markets,” the mint said in the press release.
Along with safe-haven demand driving markets, the British Mint said another major highlight from last year was an increase in digital gold sales as consumers bought smaller amounts of fractionalized gold.
The mint said 77% of customers bought bullion products smaller than the traditional one-ounce sizes. The 1-gram gold bar and one-tenth-ounce gold Britannia coin proved most popular in 2023.
The mint also said that its gold sovereign coin remained as popular as ever, and the silver Britannia continued to be its flagship bullion product, topping the most popular product list of 2023.
“The Royal Mint is committed to responding to market needs and, as part of this commitment, we have continued the development of our smaller, fractional products, allowing entry-level investment right up to our six-figure investment options. This has allowed more investors to purchase gold with us, with options to suit all needs. It is interesting to note that more customers made gold investments last year than during the lockdown investing ‘boom’ in 2020, highlighting the continued appeal of the asset class,” said Andrew Dickey, The Royal Mint’s Director of Precious Metals, in a prepared statement.
Looking ahead, the British Mint expects bullion demand to remain robust through 2024.
“The potential for central bank rate cuts in 2024 is boosting the gold and precious metals market, as the prospect of lower rates boosts demand for non-yielding assets. Traders and investors are increasingly pricing in a Fed rate cut some time in 2024, which could accelerate the price of gold alongside a weakening of the US dollar. The dual impact of this move could turbocharge gold beyond recent market highs, as recent geopolitical and economic uncertainty, alongside strong central bank gold buying, has kept precious metals markets elevated,” said Stuart O’Reilly, Market Insights Analyst at The Royal Mint.
Along with the shift in global central bank policies, O’Reilly said that geopolitical uncertainty should continue to support safe-haven demand as investors looking for protection from volatile markets.
While, the British Mint saw robust demand, the analysts also noted that 2023 saw a healthy two-way market as many consumers also sold their precious metal, capitalizing on higher prices.
The mint said it saw a record number of investors selling their gold investments back to the business, increasing 19% from 2022.
At the same time, the Royal Mint said it paid out 46% more than in 2022 to customers selling their bullion, adding that many investors likely made substantial profits on their investments.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.