Brits Hoard Gold on Brexit Nerves

As the U.K. prepares to trigger its formal departure from the European Union, some Brits have been turning for comfort to gold.

The U.K. government is expected to trigger Article 50--the legal mechanism which will start Brexit negotiations--on Wednesday after the British voted to leave the EU last June.

The resulting political and economic uncertainty helped drive a 39% rise in U.K. gold bar hoarding in 2016, according to Ross Strachan from GFMS, part of media group Thomson Reuters.

"Macroeconomic fears are conducive to increased investment demand in gold," Mr. Strachan said. During and after the global financial crisis, he pointed out, global gold bar investment increased from 237.7 metric tons in 2007 to 1246.9 metric tons in 2011.

David Govett, an analyst at Marex Spectron, said that it has become increasingly easy for British consumers to buy gold from bullion wholesales.

The increase in gold hoarding comes despite gains in the cost of the precious metal and a massive post-Brexit fall in sterling that makes buying this dollar-denominated commodity more expensive in the U.K.

The British have also been selling their gold. So-called Scrap supply rose by 67% year on year.

That of course may have little to do with Brexit. The price of gold gained around 10% last year.

"These are people who realize that Grandma's old brooch is worth more than it used to be," Mr. Govett said.