A gold broker is making a post-Brexit bet on Dublin

  • The precious metal broker, GoldCore, has opened a new storage facility in Dublin.
  • The firm expects gold investors to move physical holdings out of London.
  • After years of secrecy, London revealed the extent of its gold market on Tuesday.
A worker lifts a gold bullion bar from a conveyor machine at the Rand Refinery plant in Germiston, South Africa, on Aug. 16. 2017.
Waldo Swiegers | Bloomberg | Getty Images
A worker lifts a gold bullion bar from a conveyor machine at the Rand Refinery plant in Germiston, South Africa, on Aug. 16. 2017.

The precious metal broker, GoldCore, has opened a new storage facility in Dublin as it makes the bet that investors will look to diversify holdings away from London following the United Kingdom's departure from the EU next year.

"We think Dublin is much more palatable to the U.K. investor client as they look to store their gold. They want it to be at arm's length," said GoldCore's Chief Executive Stephen Flood on Tuesday.

The firm typically buys, sells, and stores physical gold for private clients, pension firms, or smaller retail investors. The company operates five vaults with Zurich its largest and London the next most popular.

The company opened a new storage vault in Dublin in October and Flood expects U.K. and Irish customers to seek sanctuary from the political uncertainty of Brexit.

"We expect demand in Dublin to exceed that of London sometime in 2019," Flood said.

The CEO said at a government level he expected many countries to follow Germany's example of repatriating gold to bolster the reserves of their central banks.

Who buys gold?

Gold has captivated humans since at least the times of ancient Egypt, prized by pharaohs and temple priests.

But for more modern investors gold can be a divisive asset. Some view it as a hedge against both rising prices and volatility while skeptics regard it as an expensive lump of metal, offering no dividend like stocks, or income yield like property.

Flood told CNBC that there are often certain characteristics to the type of person that likes to hold gold.

"Typically, our type of client tends to be more male than female, they tend to be director types, people who have run companies. They might be still running those companies, or they might be retired," said Flood.

The CEO said a typical holder of gold is also more concerned about preserving the safety of capital rather than hunting for returns.

Gold Bullion stacked in a safehouse.
Newscast | Getty Images
Gold Bullion stacked in a safehouse.

London's gold market

After years of secrecy, London revealed the extent of its gold market on Tuesday.

The London Bullion Market Association (LBMA) said in a press release that its members traded 30.2 million ounces a day on average last week. That equated to around $37 billion worth of gold trading in each session.

Over the same period, New York's Comex exchange recorded 34 million ounces of gold trade each day.

Most major banks and market makers are members of the LBMA but until now the body has come under fire for the opaque nature of London's centuries-old gold market.

The LBMA said data for London's gold trade will now be released on a weekly basis before a daily update is offered sometime in 2019.