By Nia Williams
Investors are flocking to buy physical gold almost a week after the surprise UK Election results as the prospect of persistent political and economic uncertainty continues.
Demand at investment firm The Pure Gold Company has increased by 76% since the Election last Thursday, with more than half coming from first-time purchasers and over 36% coming from the same people who purchased when the Brexit result was revealed in June 2016.
Josh Saul, CEO of The Pure Gold Company said: “The outcome of the UK Election and the resulting hung parliament has brought further uncertainty to an already fragile and vulnerable economy.
“We saw very strong demand for physical gold ahead of the Election as clients sought to hedge the risk of an unexpected outcome. Even after the pound fell on Friday, pushing up the price of gold in sterling terms, we saw old clients return and new clients buying gold to safeguard their assets as the political and economic uncertainty prevailed.
“The gold price is still cheaper than its peak in 2012 and many would argue that the fundamentals that support gold are stronger today than they have been for many years.”
Saul said that many of his clients believe that a hung parliament and a divided nation will make it more difficult for the UK to negotiate effective trade deals with the rest of the world, which will impact the already fragile economy. He believes they are motivated to purchase gold not merely to grow their portfolio but to protect and preserve their wealth against further unforeseen and unprecedented market forces.
“The downgrading of China’s credit rating, the rescue of Spain’s Banco Popular and a myriad other economic concerns have compounded the Election uncertainty, prompting a 41% increase in financial professionals purchasing physical gold in June,” he said.
“Meanwhile cyber-attacks, terrorist attacks and international relationships between North Korea and the US have attracted first-time buyers to purchase physical gold.
“The global uncertainty is prompting many people to try to de-risk their future assets, specifically their pension. Since the Election outcome was announced, we’ve seen a 91% increase in people looking to remove exposure to equities within their pension by purchasing physical gold within the same pension vehicle.”
Source: Everyinvestor.co.uk
