UK investors turn to gold as US and North Korea tensions rise
The Pure Gold Company reports a 132% increase in sales from UK investors this week as the war of words between president Donald Trump and North Korea’s Kim Jong-un fired up.
First time buying from UK investors is up 71% this week and while many customers said the move is down to the low interest available on savings and ISA accounts, for others, it’s the fear and geo-political uncertainty that’s driving them towards the safe haven asset.
CEO Josh Saul, said: “Fear and uncertainty within politics, international relations and national security are provoking the financial markets and people are unsure how this could affect their wealth. It’s the unpredictability that our clients are most anxious about, so they are looking for a safe place for their assets.”
He added: “Over 59% of all physical gold sales from UK investors this week have come from those in financial services including banking, accountancy and those in the hedge fund space. Their front row view of market volatility has spurred them to act quickly. Many of these clients recall the effect on financial markets when Russia attacked Ukraine or when the USA went into Iraq, and are looking to protect their assets from market decline.”
Ian Forrest, investment research analyst at The Share Centre said that stock markets around the world have fallen back due to the increased political tensions as investors turn cautious.
“As is often the case in such circumstances, many have looked for assets that are seen as less risky, one of which is gold. The precious metal enjoyed a 2.2% rise to $1292 per ounce, close to its high for the year,” he said.
For investors looking for exposure to gold and gold miners, The Share Centre highlights African mining group Randgold Resources as a preferred option.
Forrest said: “The company has been fairly consistent in increasing production and said recently that it expected to achieve the top end of its production guidance for 2017. Randgold is producing record amounts of gold each quarter and its transition from contract mining to owning its mining assets should help improve efficiencies and lower operating costs.
“Recent second quarter figures were strong with profits rising 21% to the end of June, and the gold price has risen since then. This is a share for investors looking for capital growth and willing to accept a higher level of risk.”