The Pure Gold Company has reported a 389% increase in demand from new investors over the past week compared to the weekly average for 2022. Many of these first-time buyers are turning to gold to safeguard their wealth and hedge against rising inflation.
Hospitality Sector Hit Hard
Nearly a quarter of the new gold buyers in the last week work in the hospitality sector, which has been heavily impacted by soaring energy costs driven by the ongoing war in Ukraine.
Josh Saul, CEO of The Pure Gold Company, explained:
“Some clients in the hospitality industry are considering drastic measures to manage financial losses, such as shutting down restaurants or reducing operating days to limit the impact of rising energy bills. Many are turning to gold as a way to protect their personal wealth, citing its long-standing reputation as a hedge against inflation during periods of uncertainty and geopolitical instability.”
Homeowners Seek Stability
Since August, one in ten inquiries at The Pure Gold Company has come from homeowners considering selling their properties due to concerns over rising mortgage payments, as interest rate hikes continue to counteract inflation.
“There’s a growing anxiety among homeowners about affording their mortgages,” Saul noted. “This financial pressure, compounded by inflation and rising energy costs, is leading more people to view gold as a secure store of wealth.”
Economic Uncertainty Driving Gold Investment
The escalating cost of living, geopolitical risks, and fears of a global recession have created a “growing sense of foreboding,” Saul said.
“Inflation is at its highest in over 40 years, mortgage payments are climbing, and energy bills are crippling households and businesses alike. Against this backdrop, people are seeking refuge in an asset that has historically inflated with inflation and acted as a safe haven during times of turmoil.”
Pension Shifts Towards Gold
The Pure Gold Company has also recorded a 129% rise in customers reallocating their pensions or SIPPs from equities to physical gold.
“Clients are increasingly concerned about losses in their retirement accounts, fearing they may need to work beyond their planned retirement age,” Saul explained. “Gold’s role as a hedge against declining equities offers a way to preserve a portion of their retirement savings amid stock market volatility.”
Focus on Wealth Preservation
While gold has seen a price increase of over 450% in sterling terms over the past five years, most clients are not buying gold purely for growth. Instead, they prioritize wealth preservation and inflation protection.
“Clients appreciate that U.K. investment-grade gold coins, such as Britannias and Sovereigns, are exempt from Capital Gains Tax for U.K. residents, making them a highly efficient way to safeguard wealth,” Saul added.
Amid the economic challenges of escalating inflation, geopolitical instability, and stock market uncertainty, gold continues to stand out as a reliable asset for long-term financial security.
