Local shops dealing in gold reported a surge in activity following the United Kingdom’s vote on Friday to leave the European Union – a decision that pushed international gold prices up sharply as worried investors sought a safe-haven asset.
Gold prices in Cambodia – which have climbed steadily since the start of the year – surged another 6.5 per cent to reach $1,620 per damlung on Friday, from $1,520 on Thursday. The price rise matched similar movements in international gold prices, with one damlung the equivalent of 1.2 Troy ounces.
Seing Lim, manager of Ly Hour Money Exchange and Jewelry, said many people were encouraged to come and sell their gold at her shop after local gold prices jumped $100 per damlung in a matter of hours.
“They are happy to sell it now as they earn good profit from the current soaring price of gold,” she said.
Millions of Britons voted on Thursday on whether their country should stay or leave the European Union. According to Reuters newswire, international gold prices began to accelerate swiftly as the referendum’s results began trickling in.
The spot gold price soared 6.3 per cent to 1,336 per ounce on Friday after the poll results showed 52 per cent of Britons in favour of leaving the EU.
A number of gold dealers in Phnom Penh attributed a sudden rush of customers looking to sell their gold to the decision of UK voters to “Brexit”.
Jewelry shop owner Heng Chhaytith said that it is a buyer’s market now, as 70 per cent of his customers are looking to sell gold.
“We set our gold price in accordance with the international market price, so when that price increases it attracts more people to sell their gold for profit,” he said.
Many financial analysts expected the “Remain” camp to win the British referendum, and appeared surprised by the poll results.
Suzuki Hiroshi, chief economist at Business Research Institute for Cambodia (BRIC), said the unexpected outcome sent investors looking for safe-haven assets.
“Gold is regarded as one of the safe assets for long-term investment and it is usual that the major investors would like to shift their investment to a much safer item in the case of big event, especially an event which was not foreseen,” he said.
Gold was trading at $1,580 per damlung in Cambodian markets yesterday.