Physical gold sales have increased 68% in the last week at investment firm The Pure Gold Company in the run-up to tomorrow’s election, as the deadline looms.
Chief Executive Josh Saul said: “Some of our clients are concerned that if 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 June 24th 2016, gold increased 24% over a 12 hour period following the unanticipated Brexit result despite polls reflected otherwise.
"We’ve 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.
"People are preparing for the unexpected. We have 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 in value following a potential Corbyn victory. Moreover, the sale of Banco Popular Espanol SA for 1 Euro has increased contagion worries within the banking sector, which is encouraging clients to purchase more gold.
"The Pure Gold Company have witnessed a 62% increase in retirees purchasing physical gold. Some of them are worried about the threat of cyber-attacks on bank accounts like that of Lloyds bank in January, and following on from the widespread cyber-attacks in May."
(Source: The Pure Gold Company)
The snap UK election in June and the second round of voting in France in May are galvanising investors to buy physical gold to protect against the uncertain election outcomes, according to investment firm The Pure Gold Company.
Chief executive Josh Saul said: “This past week has seen a surge in gold buyers, and this morning especially, our clients are looking to take advantage of a drop in the gold price as the French presidential polls favour moderate candidate Emmanuel Macron.”
“People purchasing gold this morning and taking advantage of a lower price remember that Clinton lead Trump in the polls and the Remain camp led over the Leave voters. The polls have been an unreliable indicator in the last few momentous votes and the general sentiment is that if people can find a way to hedge themselves with gold at a discount then they will heed the opportunity. We've seen many clients who purchased last week place orders this morning in order to reduce the overall average price that they have bought at.”
“43% of people purchasing gold have been first time investors who say their motivations for buying gold is to remove exposure to equities. They’re worried that a Marine Le Pen victory in France, uncertainty over the UK's general election in June or an escalation in hostilities between N Korea and US could result in a considerable decline in global stocks. People are purchasing gold as a hedge against these events occurring whilst hoping that they don't. This is especially true for retirees. We have seen a 105% increase in people purchasing physical gold through their SIPP or Pension in the last seven days to protect their investments from election uncertainty.
“Our largest order last week was a single purchase of £1.3m of 1oz gold Britannia's. The client was driven to invest in gold by "elections everywhere he looks." He is convinced that somewhere, at some point (soon), there will be a crash and he wants to ensure that some of his wealth has been removed from the financial system. His motivation is not to make money but instead to protect himself against financial volatility. Still, he does believe that the gold price will perform similarly to last year, and he wants to ensure that if the value of his gold grows he manages this growth in a tax efficient manner, hence his preference for tax free UK gold coins.”
(Source: The Pure Gold Company)
