The Pure Gold Company has seen a 374% rise in first time investors purchasing gold coins and bars over the last 7 days (compared to the daily average for 2019) amid fears that geopolitical tensions may provoke a global financial meltdown.
Josh Saul, CEO of the gold investment firm, said: “65% of our clients over the last week have come from financial services. They’re panicked that systemic global risks resulting from Brexit uncertainty, the US/China trade wars, strained US/Mexico relations and tension between the US and Iran are likely to continue to shake the markets. Some of our professional clients have high level banking jobs and their concern about a global meltdown is reminiscent of 2008 when similarly savvy investors were proactive about protecting themselves from market risk before retail buyers followed suit.
“When asking clients how and why they are funding their gold bar or coin purchase, 47% said they were removing exposure to poorly yielding savings accounts including NS&I and premium bonds. While many of them are frustrated with a negative yield (in relation to inflation) others are worried about bank and government instability and counter-party risk. 32% of clients have reported selling property to invest in physical gold because they fear a worsening UK property slowdown as Brexit uncertainty drags on. The remainder of clients said they have liquidated equities in anticipation of a potential market correction, which they feel is overdue and increasingly likely in light of the unpredictable geopolitical and economic climate.
“We’ve seen a 220% increase in US nationals investing in physical gold, with 85% deciding to have their metals stored in Zurich, Switzerland (outside the EU and the US). These clients are worried that a US interest rate drop and the prospect of quantitative easing will weaken the dollar and boost the gold price.
“Many of our clients are not purchasing gold purely for growth, rather they see their investment as an insurance policy against the many risks threatening our global economy. During times of fear and uncertainty, gold tends to increase while other asset classes fall in value, providing our clients with a hedge within their portfolio. Meanwhile the gold returns over the last few months are an indication of how the value of the precious metal rises in times of unpredictability.”