By Josh Saul – The Pue Gold Company – 7th June 2016
Fear and uncertainty are powerful motivators and the gold price is the clearest indicator of how worried people are. Gold is up 17.5% in the year to date, yet this is still a third below its 2012 peak of over $1,800 an ounce. There is plenty to be concerned about, from global political uncertainty to a Chinese slowdown, but closer to home people with savings and investments are increasingly worried about whether the UK will leave the European Union. So worried that bankers inside the financial system are turning to physical gold to hedge their bets, expats are buying up gold to safeguard their hard-earned currency, and retired engineers are burying it in their garden to leave a physical legacy instead of a potentially worthless electronic paper trail.
We’ve included below three case studies of genuine clients of The Pure Gold Company and their motivations for protection during these uncertain times. This has been covered by The Daily Mail and Your Money. Our client’s permission has been given here and no information used discloses their true identity.
Investment banker buys gold insurance policy
Dave, a 35 year-old investment banker, has been working in the city since he was 21. Uncertainty in the market has prompted redundancies and head count freezes within the banking industry, evidenced by friends who have been unemployed for almost a year. He believes many of the UK and EU banks are in a very dangerous position, and a vote in favour of Brexit could cause a drop in UK GDP, which may mean further job cuts at his firm. His main focus is on the aftermath of Brexit and the delayed talks with Greece later in the year over a possible default, which is more than enough to worry the markets.
Ron owns shares in a variety of markets but now he has purchased physical gold from The Pure Gold Company to hedge his position either way. He doesn’t expect to get rich on the gold price (although it is expected to rise in the near term), it’s more of an insurance policy that he hopes he won’t have to use. Many of Ron’s colleagues have followed suit.
Expat ski-instructor buys gold to hedge currency position
43 year old Phil was born in the UK and is now based in Courchevel in France during the winter as a ski instructor and Sardinia in Italy in the summer as a wind surf instructor. Having done this for 19 years, he is concerned that a vote in favour of Brexit will take away his ability to earn in the EU. If he is forced to return to the UK, the money he has saved over the last 30 years (now all in Euros) may lose significant purchasing power when converted back to sterling. He has decided to hedge his position and use a third of his money to purchase physical gold from The Pure Gold Company. He is currently having his metal stored in Zurich as he is unsure as to where his base will be in 3 months time.
Retired engineer buries his gold in £850,000 treasure hunt legacy
Ron is an 84-year-old retired plane engineer. He was widowed 3 years ago and has four daughters and 14 grandchildren. He retired at 65 and has made a substantial amount of money in the property market both in the UK and Germany. Having lost a considerable amount of his pension in the 1980s crash, he had rebuilt this only to lose more of it in 2008. He had money in Northern Rock that he struggled to recover and he lost investments in Lehman Brothers.
In 2015 Ron sold all his properties amid fears over the property market. Based on his previous experiences, fears over the banking industry and the general global economy including the Brexit vote, Ron decided to remove all exposure to cash, equities, banks and financial intuitions. Between November 2015 and April 2016 Ron purchased £850,000 worth of physical gold from The Pure Gold Company in London.
He had the gold delivered rather than stored in vaults and has buried it in his 5-acre garden using a digger to ensure it is properly buried. He has plotted unique co-ordinates and a map of his garden and has created 18 unique versions of the map – one for each of his family members. The maps have been given to his lawyer for safe-keeping.
Like any investment, physical gold must be a considered purchase. But consider this – George Soros recently bet $263 million on a gold miner, the World Gold Council expects the gold price to remain healthy, and the Chinese are buying up gold vaults in London. Josh Saul, CEO of The Pure Gold Company has seen an 32% jump in enquiries over the last four weeks as people wobble on the implications of the EU referendum and a growing number of retail investors now seek guidance on how to brace for Brexit.