Scotland Gold Demand Seen Rising Before Independence Vote

Scottish demand for gold as a protection of wealth has increased before a referendum this week on independence, according to GoldCore Ltd., a brokerage that sells and stores bullion coins and bars.

Demand from Scotland so far this month is 59 percent above the three-month average and 91 percent more than a year earlier, Mark O’Byrne, a director at GoldCore in Dublin, which has more than $200 million in bullion under management, said by e-mail today. Purchases also gained from England and Wales, both from existing clients as well as new customers, he said.

Campaigning for the Sept. 18 referendum on the 307-year-old union is nearing its climax, with three of the four polls published at the weekend showing the “no” campaign ahead, while the fourth put the pro-independence push ahead by the biggest ever margin. The pound slipped to an almost 10-month low against the dollar last week.

“With continued sterling volatility and uncertainty about the future of the pound in the short term and possibly for the foreseeable future, the Scottish independence question is a major macroeconomic and monetary risk to the U.K.,” O’Byrne said. “They are parking some money in gold due to concerns about the outcome of the Scottish referendum.”

Gold for immediate delivery rose 3.1 percent to $1,238.73 an ounce in London this year, according to Bloomberg generic pricing. Denominated in sterling, the metal gained 5.2 percent to 765.55 pounds an ounce. Scotland accounts for the second-largest share of GoldCore’s customers, after Ireland.

BullionVault Users

BullionVault, a London-based online service for investors to buy and sell physical gold and silver, said yesterday that Scotland-based users as a proportion of all its active clients grew more than 40 percent this month compared with the previous average so far this year.

London hosted a rally yesterday in support of the union and a “no” vote, while Prime Minister David Cameron made his second trip to Scotland in a week to try to prevent one of the biggest redrawings of the political map of western Europe since World War II. Labour leader Ed Miliband, who also opposes independence, is due to campaign in central Scotland today.

“Savers in sterling, whether the U.K. remains as is or fractures, are at risk of a weaker currency environment,” O’Byrne said. “Diversification of a percentage of one’s savings out of pounds and into gold will act as a hedge against currency volatility. It will also act as a store of value in an environment of depreciating currencies.”

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