Geopolitical standoffs in the Middle East have spurred a 117% increase in people investing in physical gold at The Pure Gold Company this week compared to the weekly average in 2018. Worried investors cite the extremely volatile relationship between the US, Iran, Israel and Syria, and a rift between US and European allies after the US withdrew from the Iranian nuclear deal.
CEO Josh Saul said: “More than 60% of the increase has come from financial professionals working in investment banking, trading and accountancy who are worried that an escalation of hostilities may result in an actual invasion, with echoes of the US-led invasion of Iraq more than a decade ago.
“They fear that an Israeli retaliation will result in political unrest in the Middle East which will affect global stocks and currencies considerably. There are now too many countries that are ready to go to war with the US and its allies, contributing to an already very unstable global economy and volatile financial markets. Our clients are buying physical gold as a tangible, tax efficient hedge against these risks.
“Closer to home, the Bank of England’s decision not to increase interest rates is weighing on investors. The decision has disappointed and worried savers who fear that inflationary pressures will reduce the purchasing power of their cash. Subsequently we have seen the price of gold increase by almost 3% since the beginning of May.”
First time buyers fear property slump, Pensioners seek safe-haven
“We have also experienced an 87% increase in first time purchasers investing in gold with The Pure Gold Company this week,” Saul added, “many of whom are concerned that the value of UK property has fallen for the past three months. We are seeing an increasing number of clients reducing their debt by downsizing their properties or selling investment properties, fearing a decline in value or a rise in mortgage repayments.
“Meanwhile the number of people investing in gold via their SIPP/Pension and removing exposure to equities within the same vehicle increase 187%in the week, as they fret about the effect of geopolitical risks on the value of their retirement income. Our clients are not necessarily purchasing gold for growth. What they require is safety and security in a physical, tax efficient asset class that tends to increase while other assets fall in value.”