The gold price has fallen but the appetite remains

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Capella’s Kevin Bloor on why the fall in price isn’t cause for panic.

By Kevin Bloor

After reaching a historical peak price in September 2011, there has been a fall in the price of gold over the last two years. This reduction has not been a smooth decline with short term external factors affecting the market.

This affect has happened in the past, for example when major gold reserves were released into the open market (as happened in the UK between 1999 and 2002), and poses no long term concern to the industry.

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Yes, the global base price for gold has dropped, which is partly due to the simple effect of supply and demand. However it important to note that is has only fallen to the same price of gold in June 2011.

Many people look at gold as a solid long term investment that has time and again proven its strength over long periods to deliver as a commodity – and with the majority of the market this view has not changed. The fundamentals that have driven the increase have not changed.

Although the 12 year long growth has hit a stutter, Capella has actually noted an increase in investors wanting to put their money into gold, showing us that there is still insatiable confidence in it as an investment. We as a company are now, more than ever, looking at new avenues to source more metal to refine to keep up with the demand from the investment community.

Since becoming one of the UK’s leading ethical, Fairtrade and recycled metal refiners, Capella has noticed a year-on-year growth in the interest and enquiry levels for ethical and recycled precious metals. This really has been amplified in the last 12 months with a greatly increased level of orders.

Ethical and recycled specific metal is still a niche market, but it is a growing niche that it starting to be taken seriously by manufacturers, jewellers and consumers alike. People really are starting to sit up and listen to this as a new sector.
 

Kevin Bloor is director at Capella, one of only three pure gold refineries in the UK. The company is a bullion dealer and gold refiner offering full stone recovery, investment bars and competitive scrap pricing. It is the first and the only refining company in the UK which has been audited and FLO-CERT accredited to process Fairtrade and Fairmined gold.
 

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