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Gold demand soars as Brits seek refuge from spiralling costs

Paloma Kubiak
Written By:
Paloma Kubiak

The demand for physical gold bars and coins from new investors has surged nearly 400% in the past week amid the rising cost of living, inflation woes and the threat of a global recession.

Concerned Brits are turning to gold for the first time to preserve their personal wealth and hedge against inflation, as The Pure Gold Company reports a 389% surge in demand from new investors in the past seven days (compared to the weekly average for 2022).

It revealed that almost a quarter of clients buying gold for the first time in the past week work in the hospitality sector, heavily weighed down by surging energy bills off the back of the Ukraine war.

Josh Saul, CEO of the gold investment firm, said: “Some of our clients say they are considering shutting restaurants to avoid the energy price surge which would cause excessive financial losses. Others have decided to open only three days a week.

“Many of these clients have said they are trying to protect and preserve their personal wealth and see gold as an asset class with a proven track record as an inflation hedge especially during times of uncertainty and geopolitical concern.”

Saul also revealed that since August, one in 10 customer enquiries came from people considering selling their homes in the short-term.

“They’re worried they won’t be able to afford their mortgage payments because of interest rates hikes used to dampen inflation,” he said.

‘Growing sense of foreboding’

Saul added: “There is a growing sense of foreboding. Increasing mortgage payments and escalating energy bills are set against a backdrop of the highest inflation in over 40 years. Meanwhile geopolitical risk and the reality of a global recession are adding to the uncertainty. It’s prompting people to take refuge in an asset class that inflates with inflation and can be a safe-haven asset amid the turmoil.”

Elsewhere, The Pure Gold Company said it has seen a 129% increase in customers removing exposure to equities within their SIPP/pension in order to buy physical gold within the same vehicle.

Saul explained: “Clients are concerned that losses in their retirement accounts will result in them working beyond retirement age. As a safe haven asset, physical gold can act as a hedge against declining equities, so can protect some of their retirement savings against a stock market slump.”

The price of gold has increased over 450% over the last five years in sterling terms, but the firm said customers aren’t just buying it purely for growth.

“The priority is wealth preservation in an asset class that has the best chance of outperforming inflation. Most of our UK based clients take advantage of UK gold coins which means that any gains are tax-free depending on individual circumstances.,” Saul added.