Gold rush as fears of a second coronavirus wave increase
The Pure Gold Company has seen a 683% increase in first-time investors purchasing physical gold bars and coins over the past seven days.
The company says investors fear the threat of a second lockdown will damage an already fragile economy with renewed social distancing rules tipping the equity markets into freefall.
Gold is seen as a safe haven a crisis, due to its defensive qualities and lack of correlation to equities and bonds.
Josh Saul, CEO of The Pure Gold Company, says: “The Pure Gold Company has been taking orders from frantic buyers until 11pm. Enquiries have increased by over 230% in the last 24 hours (compared to our average daily rate) because these clients don’t intend to miss out on gold supply as so many did in March when the first lock down restricted supply.
“More than two thirds of clients who purchased gold during the last lockdown have returned over the last 48 hours for more gold bars and coins.”
Back in March global stocks of gold fell by up to 30%, with the gold price increasing by 13% in just one week.
Gold refineries had to close during lockdown and gold supply was the lowest ever seen. Many potential buyers were placed on waiting lists.
Gold prices hit an all-time high in August, rising above $2,000 an ounce for the first time. It is currently about $1,875 an ounce.
The Pure Gold Company says it’s seen an 850% increase in clients removing further exposure to equities in their pensions or self-invested personal pensions to purchase gold within the same investment wrapper.
Saul says: “Our clients are not merely purchasing gold for growth. What they seek is safety and security in an asset class that tends to increase while others fall in value. Purchasing physical gold removes counter-party risk from the financial system, and transfers wealth into an asset class that can being converted into currency anywhere in the world. And in the UK, our clients who have purchased UK gold coins have avoided paying any capital gains tax on their growth.”