By Gary Howes for PoundSterlingLive.com
Expat Russians living in the UK have been notable buyers of physical gold says a major gold investment firm.
In a statement the Pure Gold Company said it has experienced a 300% surge in interest over the last week compared to the 12-month average.
On the eve of the Russian invasion of Ukraine jumped another 130%.
“We’ve seen a notable increase in Russian clients purchasing gold bars and coins (217% – over the last 7 days) in order to remove their wealth from the financial markets,” says Josh Saul, CEO of the Pure Gold Company.
Gold prices have surged amidst a global demand for gold in response to Russia’s invasion of Ukraine, resolutely confirming the commodity’s status as the ultimate safe haven.
Gold prices rose a further 2.60% day-on-day on February 24 to reach $1958 an ounce.
“These buyers are expat Russians, UK residents including doctors, teachers and engineers, who fear that their assets and accounts could be caught up in sanctions against Russian businesses and banks,” says Saul.
The Pure Gold Company says it has also seen a 72% increase in client enquiries from people putting their property on the market in order to avoid higher interest rates and therefore escalating debt.
Many of these clients are said to be looking to use gold to hedge against the inflationary environment, and they think property prices could start to fall as the notion of “free money” (ultra-low interest rates) disappears.
The Pure Gold Company reports seeing more than a 600% increase in people removing exposure to equities and funds within their pension / SIPP in order to purchase physical gold bars within the same vehicle in the last week.
The financial aftermath of the pandemic coupled with inflationary pressure and geopolitical uncertainty is negatively affecting equities which can adversely weigh on people’s retirement prospects.
“Purchasing gold allows clients to remove their wealth from the banking system during times of unrest but with the necessary liquidity to buy back into the equity market when they’re ready to do so,” says Saul.
He says clients do not purchase gold purely for growth. It is safety and security from unpredictability which is the underlying driver.
“Clients understand that their savings are in an asset class that is physical, that tends to increase in value during times of uncertainty (and is free from tax in certain circumstances) and can be converted back into cash quickly. Gold has been a safe-haven asset for hundreds of years, and many are looking to this safe-haven now as the geopolitical and economic uncertainty returns,” says Saul.