The Pure Gold Company
Josh Saul comments on the increase in business seen in the gold industry in the wake of the North Korean nuclear test.
By Rosie Murray-West
The gold price has hit a one-year high in the wake of the North Korea nuclear test.
Experts said that the test had driven more buyers into so-called ‘safe haven assets’ than had been moved to buy gold following the Brexit vote, with Josh Saul, chief executive of the Physical Gold Company, said his business had seen calls increase by 176 per cent over the weekend.
“The number of people purchasing gold this morning has outperformed the number the day after the Brexit referendum on 24 June 2016 when the gold price in sterling terms increased 26 per cent in 24 hours,” he said, blaming tensions between North Korea and the US following the nuclear test.
“Many clients are very concerned that matters could escalate quickly and with the threat of nuclear weapons (on both sides) some fear the worst,” he said.
“We’ve seen an 89 per cent increase in financial professionals purchasing physical gold. They cite the same geopolitical fears and are buying to protect themselves from the systemic financial consequences of increased volatility and uncertainty, which may ultimately lead to currency and equity market crashes.”
Spot gold prices had risen just over one per cent to $1,338.36 (£1,033) per ounce by 07.08am this morning (4 September), after earlier touching their strongest level since late September at $1,339.47 (£1,034).
Martin Arnold, director and macro strategist at ETF Securities, said that gold had regained all losses made since Donald Trump became US president.
He said: “The concerning response from the US is likely to keep gold supported in the near-term.
“The improving global economic backdrop will take a back-seat for gold prices until geopolitical tension eases, something that will likely be prolonged with a less than statesmanlike attitude from the Trump administration to foreign affairs.”
Source: The FT Adviser