As an Investment Option
The EU Referendum result sent shudders across the nation in terms of confidence in the financial market. With fear of future bank failures or a collapse in the entire financial system, ordinary investors are looking for tangible assets, such as gold, as an alternative way to invest their existing wealth.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Our firm can not offer investment advice on real assets such as gold.
An unprecedented interest in gold
Gold is considered, by some, to be a safe haven in times of financial stress. It is an asset which is least affected by inflation compared to other assets such as stocks and shares.
Since Brexit, brokers are noticing an unprecedented interest in purchasing gold, particularly from new buyers – as in, those who have never invested in gold before.
“The speed at which people are purchasing gold is unprecedented.” Joshua Saul, CEO of The Pure Gold Company
The Pure Gold Company commented that some investors are converting as much as 50 percent of their net worth into gold. Normal levels are around five to ten percent.
In addition, the Royal Mint, a government-owned producer of gold bars and coins, reported a 7-fold increase during the weekend following Brexit, for purchases of their 100 gram bars. This was compared to a 12 month average weekend performance.
A 100 gram bar is around half the size of a credit card and was priced at approx. £3,300 in the weeks following the Referendum.
On the weekend just after the Brexit result was announced, four million pounds worth of transactions were made for silver and gold and the number of first-time buyers showing an interest in gold investment increased by 170 percent in June and early July.
Of course, gold has been popular in other periods of financial uncertainty, and historically as the fear dissipates, so does the interest. Slowly but surely investment decisions return to normal. However, the Royal Mint feels this time could be different, with 50 percent of the buyers choosing the store their gold or silver in the vault at the Royal Mint.
“This shows little sign of declining,” the Royal Mint
The importance of investment planning right now
In times of financial uncertainty, financial and investment planning is even more critical than usual.
Whilst gold is something some investors are warming to, there are still options for you to build and protect your wealth in a wide range of financial products. The key is planning and also careful monitoring, so working with a financial adviser can certainly help with making the right decisions right now.