Gold investment firm The Pure Gold Company saw a 93% increase in the sale of physical gold bar and coin purchases in 2023 compared to sales in 2022, as clients sought to safeguard the value of their assets against inflation and protect themselves from the impact of geopolitical uncertainty.
CEO Josh Saul said: “The Pure Gold Company asks every client what motivates them in their purchase of physical metal and, interestingly, last year we saw the number of people referring to “a fear of counter-party risk” more than triple (a 327% increase). The counterparties they are worried about are banks, building societies, funds and even the counterparties to their other investments like company shares. The rapid increase in bank branch closures along with the share price slump at both Metro Bank and Natwest has contributed to a breakdown in confidence within the banking industry.
“Our clients view the purchase and custody of physical gold as a way of moving wealth out of the banking system and into a physical asset that traditionally outperforms inflation but is capable of being liquidated extremely quickly. There’s also no tax to pay on certain physical gold investments depending on individual circumstances. The tax advantage is of particular relevance given the gold price has increased by 60% over the last 5 years. It’s also attractive for those that have already maxed out their ISA and pension contributions for the financial year.
Physical Gold And Pensions
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“Some clients are focused on immediate volatility like the wars in Russia-Ukraine or the Middle East, while others are also looking forward, to both the UK and US elections later this year, and preparing their portfolio for more uncertainty by purchasing gold. This is especially relevant for our customers who are putting physical gold into their pension vehicles.
“Last year, The Pure Gold Company saw a 429% increase in people removing exposure to equities, property and cash within their SIPP/pensions in order to purchase physical gold bars within the same vehicle. Clients that want to retire early are acting on concerns that a fall in the value of their pension pot will mean that they need to work on average five year longer than planned, with some seeing little to no prospect of being able to retire at all.
“Physical gold provides investors with a safety net in an asset that tends to increase while other commonly held assets like equities or property fall in value. Our clients are not necessarily buying gold for growth. Rather, they’re focused on the precious metal’s history as a safe and secure asset that holds its value long-term, with growth as an added bonus.”