Sometimes gold in Ireland is found at the end of a rainbow, and sometimes at the end of an EU membership (AFP Photo/PAUL FAITH) |
Dublin (AFP) - In a vault under the streets of Dublin a pot of gold owned by anxious investors is growing every day Britain edges closer to leaving the EU without a deal.
"They're
worried about a significant devaluation in sterling if there's a hard
Brexit," said Seamus Fahy.
Fahy is
co-founder of Merrion Vaults, a gold brokerage and safe deposit facility in the
centre of the Irish capital.
Over 2018
-- as the prospect of Britain crashing out of the EU turned from a scare story
into a very real prospect -- he has seen a 70 percent rise in clients from the
British province of Northern Ireland.
"Customers
are taking money -- physical money -- out of the bank and they're buying gold
bullion with us to store it, and it's a hedge," Fahy explained.
There is no
equivalent facility in Northern Ireland.
With the
border only an hour away it is no long trip to secure peace of mind as Britain
risks a split with the EU critics are branding a "cliff-edge Brexit".
A hidden
investment
Set in the
basement of an unassuming grey office block, Merrion Vaults does not advertise
its presence to passersby, marked only with a coy plaque reading "Merrion
Private".
Down an
elevator, past a manned security booth and a fingerprint scanner -- as well as
a hefty metal safe door -- is a caged vault, ranked with 3,000 double-locked
deposit boxes.
Their full
contents are known only to clients. But Fahy knows that inside many are
glimmering stashes of gold.
Numerous
customers have spent over £500,000 (560,000 euros) on their precious nest
eggs.
Gold has
been a profitable hedge against sterling's losses (AFP Photo/PAUL FAITH)
|
The most
popular items are one ounce (30 gram) gold bars and coins: handsomely polished
South African Krugerrands, Canadian Maple Leafs and British Britannias worth in
the region of £1,100 (1,200 euros) each.
They have
increased in value by around 10 per cent in the past six months, according to
Fahy's ledger.
When news
of the 2016 Brexit vote broke, gold surged as sterling plunged to levels not
seen since 1985.
The result
was an historic 22 per cent jump in gold valued in British currency terms.
In
December, when British Prime Minister Theresa May pulled the parliamentary vote
on her Brexit deal, Fahy also saw a "big uptick" in demand.
Pundits saw
that as the most foreboding indication yet of a no-deal Brexit on March 29.
'Flight
to safety'
The
prospect of the fallout sinking sterling seems to be making investors skittish.
"In
times of crisis you always see what's called this 'flight to safety' -- so
people go into US government bonds, gold bullion, Swiss francs etc.," said
Fahy.
The future
status of Northern Ireland -- the so-called "Irish backstop" -- is at
the crux of the Brexit conundrum and has added particular concerns on the
island.
"You
often see local events driving local demand," said Alistair Hewitt, head
of market intelligence at the World Gold Council.
But Hewitt
said that the Brexit gold rush may have already peaked in the rest of Britain,
with "an upsurge of activity" around the vote itself.
"Over
the course of the past two years that's probably petered out a little bit. I think
lots of investors have probably suffered a bit of Brexit fatigue."
VIDEO: Under lock and key -- and past a fingerprint scanner -- this Dublin vault is hoarding a Brexit bonanza pic.twitter.com/4MZwFpD0Ma— AFP news agency (@AFP) January 19, 2019
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