By Pedro Gonçalves
As the likelihood of a no-deal Brexit grows, investors are racing to secure gold with the Pure Gold Company reporting a 632% increase in people purchasing physical gold bars and coins over the last week, compared to the weekly average for 2019.
Bullion bar prices for UK investors edged back £10 after re-touching last week’s fresh record high of £1271 overnight as the ruling minority Conservative Party saw its leader in Scotland, Ruth Davidson, quit over prime minister Boris Johnson closing Parliament for 5 weeks, reducing time to debate Brexit before the UK’s Halloween deadline for leaving the European Union.
Josh Saul, CEO of the gold investment firm, said: “Boris Johnson shutting down parliament has shattered any real hope that the country could leave with a deal and has fragmented UK politics even further. August is usually one of our quieter months, but so far it’s been our busiest for 2019.
We’ve also had a 242% increase in the amount of first time investors such as teachers, engineers, bus drivers and civil servants purchasing gold this week”
“We’ve employed more staff to deal with the overwhelming amount of panic stricken investors and most of our consultants are taking orders from 6am until 10pm. The speed at which people are purchasing is similar to 2007/8 after the collapse of Northern Rock and Lehman Brothers.
Investors are racing to secure the precious metal because they fear the combined effects of a possible no deal Brexit and the ongoing trade war between China and USA will lead to a global crisis.
“Confusion regarding the US-China trade talks saw investors continue to pile into safe-haven assets yesterday,” said a trading-note from gold-bar refining group MKS Pamp.
“Equity markets retreated on fears a recession is looming as the yield curve inversion deepened and there was no positive newsflow on the trade front,” the note added.
“We’ve also had a 242% increase in the amount of first time investors such as teachers, engineers, bus drivers and civil servants purchasing gold this week. They’re concerned about the safety of their cash in bank accounts and the vulnerability of some of our UK banks. Given that interest paid on savings accounts is so low, some are now worried that UK banks will start charging us to keep our money – something that has already happened in Denmark and Switzerland,” Saul also added.
Source: International Investment