British consumers are increasingly turning to pawnbrokers to cash in their jewellery as the price of gold reaches record highs, driving a significant surge in lending activity and boosting profits for industry leader Ramsdens.
Record Lending and Profit Forecast Upgrade
Pawnbroking lending hit unprecedented levels in February 2026, with the momentum continuing strongly into March, according to Ramsdens. This surge has expanded the company's loan book by an impressive 18 per cent since the end of the previous financial year in September.
The London-listed business has responded by substantially upgrading its annual profit forecast. Ramsdens now anticipates achieving a pre-tax profit of at least £24 million for the year ending September 2026, with potential to reach as much as £28 million. This represents a notable increase from analysts' previous expectations of £21.1 million.
Gold Price Rally Driving Demand
The precious metal's remarkable price increase is the primary catalyst behind this trend. Gold has rallied to achieve record highs multiple times during 2026, with a particularly sharp spike occurring in early March following escalating conflict in the Middle East. At that point, gold reached approximately $5,400 (£4,040) per ounce.
The average gold price for the year-to-date stands about 50 per cent higher than the previous year's levels. Ramsdens has indicated that the ongoing geopolitical and economic climate suggests gold prices are likely to remain elevated throughout the coming months.
Multiple Revenue Streams Benefiting
Ramsdens operates through several business segments that are all experiencing growth:
- Pawnbroking loans secured against jewellery or watches
- Purchase of unwanted items for resale through stores, online platforms, or to bullion dealers
- Jewellery retail shops, where revenues have increased by approximately 25 per cent year-on-year
Chief Executive Peter Kenyon emphasised: "In addition to underlying progress across the business, we continue to benefit from the high gold price, which is significantly boosting both customer demand and profits within our purchase of precious metals segment."
Broader Market Context
The phenomenon extends beyond pawnbroking alone. Official figures indicate that retailers enjoyed a better-than-expected festive sales bounce-back recently, with online jewellery firms particularly benefiting from strong demand for gold and silver items.
Investors have been seeking refuge in gold amidst global geopolitical uncertainty, international conflicts, and concerns about tariffs. This safe-haven demand has contributed substantially to the metal's price appreciation.
Analyst Perspective and Market Reaction
Russ Mould, Investment Director at AJ Bell, commented: "This is the second profit forecast increase of 2026, following on from February's trading update, and means Ramsdens is now on track to post record annual earnings in the 12 months to September 2026."
He added: "The good news is it is not just the soaring gold price that is doing the heavy lifting. Ramsdens reports strong sales of jewellery and rapid growth in the pledge book at the pawnbroking operation, while the foreign currency exchange business seems steady."
Mould did note a potential caution: "Although there remains a chance that the conflict in the Middle East has an impact there at some stage."
The market responded positively to Ramsdens' announcement, with shares jumping by approximately 10 per cent on Wednesday following the upgraded forecast. This performance underscores investor confidence in the company's ability to capitalise on current market conditions.
