Greek demand for gold coins is rising as investors search for a safe haven from the country’s political turmoil, according to the U.K. Royal Mint.
“There has been a noticeable increase in demand in this last quarter,” Lisa Elward, head of bullion sales at the Royal Mint, said in an e-mail to Bloomberg News. “We tend to see an upsurge in sales at times of political and financial uncertainty.”
Greek investors are turning to gold with the nation heading toward a standoff with creditors over its international bailout program, fueling speculation that it may break its membership with the euro. The Royal Mint declined to provide exact sales figures for the gold coins, known as Sovereigns.
The Bank of Greece sold 5,849 Sovereign coins in January, according to an e-mail from the central bank, which said the numbers do not show any “abnormal activity.” While it didn’t provide monthly figures for comparison, government data show sales of 7,857 coins in the last quarter of 2014.
Greece’s bonds and stocks fell on Monday as Prime Minister Alexis Tsipras said in an address to parliament on Sunday that he still plans to ditch an existing funding plan that ends on Feb. 28. The three-year note yield rose 3.24 percentage points to 21.24 percent at 4:54 p.m. London time.
“The one thing everyone knows about gold is it is a good thing to hold if your currency is about to devalue,” Matthew Turner, an analyst at Macquarie Bank Ltd., said via phone. “It would be understandable for Greeks to buy gold because they are afraid of losing their money.”
Withdrawals from Greek banks may have exceeded 15 billion euros ($17.2 billion) in the run-up to the elections that catapulted Tsipras and his anti-austerity Syriza party to power, including at least 11 billion euros in January, according to four bankers citing preliminary data.
Gold climbed 4.7 percent this year as investors sought a safe haven from a slowdown in economic growth outside of the U.S. and concern that Greek debt negotiations will undermine financial stability in Europe. The metal for April delivery was up 0.5 percent to $1,240.10 an ounce on the Comex in New York.
Online retailer CoinInvest.com reported increased sales to Greece around the country’s elections in January, the Frankfurt-based director Daniel Marburger said in an interview last week.
Greece topped the list of worries for Group of 20 finance chiefs as they started talks in Istanbul on Monday with calls for the nation and its creditors to strike a new aid deal. Although global economic growth and Europe’s defenses are both stronger than when Greece flirted with exit from the single currency three years ago, leaving now would still shock financial markets.
“During periods of monetary uncertainty people will always think gold is a useful addition to their portfolios,” Turner of Macquarie said.