The skyrocketing price of gold in global markets has, as expected, significantly affected transactions of British sovereigns in Greece, with the Bank of Greece (BoG) reporting nearly 36,000 buy back transactions this year up until the end of September.
Conversely, Greece’s central bank sold only 4,662 sovereigns – the venerable gold coins issued by the UK Royal Mint – to private citizens over the same period.
While the BoG is one of the few official venues in country where sovereigns can be legally purchased and sold, along with at least one commercial bank, a brisk “underground” market has existed for decades under the guise of numismatics and gift-giving for weddings, engagements and baptisms.
Jewelers and coin collectors are often approached by would-be buyers and sellers of sovereigns, given that the BoG rates have a distinct gap between the rate that the central bank sells the coin and the rate offered for purchasing one.
The price of gold hovered at 2,700 USD per ounce last week on the back of fears due to the possibility of an escalation of Mideast conflicts and uncertainty ahead of the US presidential election, having gained 30% since the beginning of the year. Some analysts now predict a rate of nearly 2,900 USD per ounce over the coming year.
In Athens on Friday, the BoG announced a rate of 567.98 euros purchasing a gold sovereign, and 678.02 for selling the coin – a noteworthy spread of 110.04 euros.
The same BoG rates at the end of 2023 were 425.10 euros for buying back and 512.25 euros for selling – an increase of 11 percent compared to current rates.
The development coincides with the long-awaited acceptance by the BoG of payment via platforms registered on the Single Euro Payments Area (SEPA), for transactions of up to 100,000 euros.
At the same time, the BoG has capped daily transactions for sovereigns at 500 euros.
