The Pure Gold Company
07/06/2017
The Pure Gold Company quoted on InvestmentWeek.com on the 68% jump in gold sales over the past week.
By Tom Eckett
Nervous investors have sought haven in gold in the lead-up to the UK General Election, with sales surging 68% at one firm in the last week.
The Pure Gold Company said physical gold sales have jumped following the narrowing of Prime Minister Theresa May’s majority as investors “prepare for the unexpected”.
Chief executive Josh Saul said: “Some of our clients are concerned that if [Labour party leader] Jeremy Corbyn wins the election then national security will be threatened, which would negatively affect the financial markets including the value of sterling and the stock market.
“While the polls reflect a May victory, similar polls predicted a Clinton Victory and a Remain vote in the UK Brexit referendum, and our clients remember how that turned out. On 24 June 24 2016, gold increased 24% over a 12-hour period following the unanticipated Brexit result despite polls reflected otherwise.
Sterling dips as May’s lead narrows further
“We have seen a 64% increase in people investing in gold for the first time, citing fears that a further terrorist attack will add uncertainty to an already volatile market.”
He added the firm had also seen a 49% increase in financial professionals purchasing physical gold to hedge themselves against the expectation of short-term volatility, counterparty risk and the possibility of sterling dropping following a potential Corbyn win.
Meanwhile, sterling is expected to fall to as low as $1.20 if Prime Minister May fails to win a majority in the General Election, according to a Bloomberg poll of analysts.
The poll highlighted that a large majority for the Conservative Party would see sterling rally to $1.31 while a small majority for the Tories would see the pound rise to $1.30.
Analysts said a Conservative majority has already been priced in to markets with investors confident of May’s party delivering while a surprise victory for Jeremy Corbyn’s Labour Party would see sterling fall to $1.248.
Asset allocators back sterling to ‘easily recover’ despite Brexit fears
The latest poll from YouGov shows the Conservative Party winning 304 seats, 22 seats short of the number required for a majority, with the Labour Party winning 266.
Sterling has shown somewhat of a recovery in recent months, climbing from the lows of $1.919 in January to $1.29 in today’s early morning trading however the poll suggests sterling could return to those levels if May does not deliver a majority.
Hartwig Kos, vice-CIO and co-head of multi-asset, SYZ Asset Management, said: “We believe there is a tail risk of a hung parliament, which means that neither party has sufficient seats to have a majority, we assign a low probability to that.
“Yet, such an outcome would have a severe impact on all UK asset classes, in particular sterling. It would also most likely force Theresa May to step down as Prime Minister.”
The FTSE 100 is almost 15 points lower this afternoon at 7,509.7 points as Britons prepare to head to the polls tomorrow.
Source: Investmentweek
