Simple question, that is bugging me. I love this sound of this stringed instrument, but I have no idea what it is?
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Sounds like a harp, but not a full-size concert harp. The sound is similar to 12-string, or other instruments related to the guitar, but there is a low note at 1m16s which has such resonance it could only really be played on a harp.
I'd think most likely a Celtic harp.