The Pure Gold Company
Investors flocked to the safety of gold in the hours after the UK experienced political turmoil as two senior cabinet members resigned yesterday.
By Paloma Kubiak
First, Brexit Secretary David Davis quit his post before Foreign Secretary Boris Johnson signed his resignation.
The moves sent shockwaves through the political world, and for investors, they saw sterling lift then fall back as the resignations were announced.
But for gold, the moves were far more noticeable. The Pure Gold Company reported a 237% increase in people buying physical gold on Monday following the senior cabinet members’ news.
Over half of those investing in physical gold were financial professionals removing exposure to equities in anticipation of financial market volatility as political uncertainty increases.
CEO, Josh Saul said enquiries throughout Monday evening through to Tuesday morning increased by 312%.
Saul said: “The atmosphere was reminiscent of the weeks before the Brexit referendum, and half of the same clients who purchased in the three days either side of the referendum in 2016 felt the UK is in store for a similar rollercoaster. In 2016, when the Brexit referendum was announced, sterling plummeted and gold increase by over 25% (overnight). At present, sterling has declined and gold is up 1%.”
The CEO added that the general sentiment right now is confusion and uncertainty with many buying gold because they’re worried Theresa May could be ousted out of office and replaced with someone in support of a hard Brexit.
“The lack of support for Theresa May from within her own party threatens the perceived stability of the UK government and some feel this will strengthen Jeremy Corbyn’s fight for power.
“In a poll carried out by The Pure Gold Company in June, 72% of people believed a hard Brexit will lead to a deep recession and result in considerable losses to their equity portfolio and pensions. The economic signs are bleak. 59% of the people polled were concerned that on the high street big names like Toys R Us, Maplin and Pound World have collapsed, stores are closing at Prezzo, House of Fraser and M&S, and several companies have issued profit warnings including the UK’s largest estate agents Countrywide.
“We’ve seen a 193% increase in people removing exposure to their equities from within their pensions / SIPP’s over the last three months in order to purchase physical gold bars within the same vehicle. Many believe that the stock market has seen the longest bull run in history and with the long-term uncertainties that lie ahead many investors prefer the safer option in gold.”
Source: Your Money