Yahoo! Finance: Investors rush to gold safe haven amid Brexit and election uncertainty

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The Pure Gold Company

16/06/2017

Josh Saul on Yahoo! Finance discussing the aftermath of the shock General Election and the value of gold when hedging against the risk of unexpected political events.

By Sabuhi Gard
A lack of clarity surrounding the UK’s chosen exit from the EU and the future of the Conservative government has pushed investors toward gold as a safe option.

According to The Pure Gold Company, a gold dealer based in London, global uncertainty is prompting many people to try to de-risk their future assets, specifically their pension.
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Since the shock election outcome which failed to see the Tories secure a parliamentary majority, the firm said it has witnessed a 91% increase in people looking to remove exposure to equities within their pension by purchasing gold within the same pension vehicle.

The firm’s CEO, Josh Saul, said the political landscape has brought “uncertainty to an already fragile and vulnerable economy”.

“We saw very strong demand for physical gold ahead of the election as clients sought to hedge the risk of an unexpected outcome,” he said.

“The gold price is still 15% cheaper than its peak in 2012 and many would argue that the fundamentals that support gold are stronger today than they have been for many years.”

How has gold so far performed this year?

Gold has rallied so far in 2017 – after hitting a six-year low in December 2016 it now stands at $1,266 per ounce, up from $1,062 on December 1.

Last time the price of gold was that low was in October 2009 when it dropped to $1,043.

Gold hit a 4-session high on June 14 (see chart below) as the dollar sank ahead of the US Federal Reserve’s long-expected June interest rate decision, following weaker-than-forecast economic data.

Gold hit a 4-session high on June 14 (Yahoo Finance)

(Yahoo Finance)

How to invest in gold

Buying physical gold

Investors can buy physical gold through trading platforms such as BullionVault.com. Gold bullion can be bought or sold in small units and stored in secure vaults on someone’s behalf.

Buying gold ETFs

Investors can buy gold through an exchange traded fund (ETF) which tracks an index or aims to replicate the performance of an asset.

Some track the price of gold and are like shares, they can be bought and sold via a stockbrokers or investment house.

Bullion coins and bars

Bullion coins can be bought through the Royal Mint – in the shape of sovereigns, Britannias or Lunars. Gold bars can also be bought for as little as £20.

Source: Yahoo! Finance

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“The gold price is still 15% cheaper than its peak in 2012 and many would argue that the fundamentals that support gold are stronger today than they have been for many years."

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