Fears over a possible cryptocurrency crash and the uncertainty sparked by one of the biggest ever company liquidations are cited as key reasons gold sales have jumped at The Pure Gold Company, a UK provider of investment services.
PGC said it saw a 42% increase in first time investors buying gold so far in January compared to the same period a year ago. Possible drivers additionally to the crypto crash fears include geopolitical tensions and uncertainty over Brexit, leading to ‘safe haven’ sales.
The collapse of one of the UK’s biggest construction companies in recent days has not helped local confidence in risk assets, suggests Josh Saul, CEO.
“The collapse of Carillion this week has impelled financial services professionals to buy gold in greater numbers too. We’ve seen a 69% rise in sales to people in finance citing fresh concerns over systemic risks caused by the collapse of the UK construction giant. More specifically, sales to investment bankers have risen 32% this week amid fears that businesses connected to Carillion, especially the banks, could be affected by the large amount of debt that is unlikely to be repaid.”
“The expectation of another interest rate rise this year, against the backdrop of record debt and millions of people who, until November, had never experienced a rate rise before, is fuelling worries that people may have to sell property to pay unaffordable mortgages and debt.”
“Our clients aren’t purchasing physical gold with a short-term view to making an immediate profit. It’s more about protection and wealth preservation during uncertain times. Many of our clients see it as a financial insurance policy that tends to increase as political, economic and monetary risks escalate. Looking ahead, these risks aren’t likely to abate substantially, prompting more people to look for a safe haven for their assets.”