The Pure Gold Company
The Pure Gold Company quoted in the FT Adviser on the sudden rush in gold sales following the uncertain result of the UK election as investors rush for safe havens.
By Simoney Kyriakou
Gold sales soared 87 per cent as election uncertainty started to kick in.
By 10pm on Election day, Thursday 8 June, gold trading companies reported a rush of business as investors started to remove their sterling exposure and head for gold.
Josh Saul, chief executive of the Pure Gold Company said the firm stayed open until 10pm last night, taking orders from “panic-stricken investors”.
He commented: “We saw an 87 per cent increase in people purchasing gold in the last 24 hours, with many motivated to hedge against unpredictability, specifically removing exposure to sterling.
“It seems that many of our professional clients have had the right idea given sterling has fallen and the gold price has increased by around 2 per cent.”
As the uncertainty grew over the prospect of a hung parliament, Mr Saul added: “We’ve also seen a 63 per cent increase in people removing exposure to equities within their pension in order to purchase physical gold in the same vehicle.
“Brexit worried people last year and the prospect of a hung parliament is perceived to weaken our position on trade agreements.
“Our clients feel that this could considerably affect our economy and it’s this that is driving them to hedge their wealth, including their retirement, with a risk adverse asset class such as physical gold.”
BullionVault, the online platform for physical gold trading, also saw similar trends emerge as news of a Conservative wipeout hit the airwaves.
Adrian Ash, director of research at BullionVault, said: “It’s rare that political events move gold prices directly, but the fall in sterling is clearly driving bullion higher for UK investors and savers.
“With gold back above £1,000 per ounce, gold buyers on the BullionVault exchange continued to be net sellers overnight.
“Traders were not as active as they were during the early hours of the Brexit referendum result, yet BullionVault saw four times the traded volume normally seen between the time the first exit poll was announced at 10pm and 9am this morning.
“While it can’t defend savers and investors against higher taxes, worsening inflation or economic recession, gold tends to do well when other assets do badly.
“The clouded outlook for shares, gilts and particularly the pound make gold a must-have form of investment insurance as the reality of this hung parliament bites.”
Source: The FT Adviser