Contact us
CALL US NOW 1-888-GOLD-160

British Buy Gold in Wake of Election Uncertainty

  by    0   0

What did Brits do before the recent elections in the UK?

They bought gold.

According to the Financial Times, gold sales soared 87% as uncertainty kicked in on election day earlier this month. As prospects of a hung Parliament loomed, “panic-stricken” investors converted their  sterling into gold.

The election results were a disaster for the majority Conservative party. It ended up with a net loss of 13 seats with 42.4% of the vote. Labour made a net gain of 30 seats with a 40.0% vote. The results cast a cloud over the complex task of making Brexit a reality.

There was a similar rush into gold in the UK leading up to and after the Brexit vote last year. One gold company CEO reported some people converted as much as 40 to 50% of their net worth into physical gold in the weeks after the UK voted to leave the EU.

Pure Gold Company CEO Josh Saul said the scene was similar on election day June 8. He stayed open until 10 p.m. taking orders.

Brexit worried people last year and the prospect of a hung parliament is perceived to weaken our position on trade agreements. Our clients feel that this could considerably affect our economy and it’s this that is driving them to hedge their wealth, including their retirement, with a risk adverse asset class such as physical gold.”

Saul said there was a 63% increase in people removing exposure to equities within their pension in order to purchase physical gold in the same vehicle.

Adrian Ash, director of research at BullionVault, called gold a “must have” in the current political environment in the UK.

While it can’t defend savers and investors against higher taxes, worsening inflation or economic recession, gold tends to do well when other assets do badly. The clouded outlook for shares, gilts and particularly the pound make gold a must-have form of investment insurance as the reality of this hung parliament bites.”

The surge in gold sales in the UK comes as no surprise. Political uncertainty and geopolitical tensions around the world tend to set people on edge and drive them to seek the safe-haven gold traditionally offers. An abundance of caution has been pushing gold higher this year, at least prior to the most recent Federal Reserve interest rate boost and its suddenly hawkish rhetoric.

But despite what the Fed might say or do, the fundamental uncertainty in the world has not changed in the last two weeks – not in the UK, nor in the rest of the world.  As we’ve pointed out in recent months, uncertainty seems to be the new norm. Next week, there will be a whole new set of political issues, surprise events, and rising tensions to make us uneasy.

We shouldn’t wait for an unsettling event to buy gold. When things go south, it’s too late. If we believe gold is a safe haven, we should have it in hand before the storm. As the Boy Scouts say, “Be prepared.” In today’s political and economic climate, it seems wise to always proceed with some level of caution.


Get Peter Schiff’s most important gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Inflation Isn’t a Supply Chain Problem; It’s a Money Problem

High inflation is the worst-kept secret out there, but the government, central bankers and financial media have all downplayed the threat. The folks at the Federal Reserve keep telling us that rising prices are “transitory,” the product of a robust and fast-moving post-pandemic economic recovery. One of the reasons often given for rising prices is […]


Central Banks Continue to Be Bullish on Gold

Central banks added gold to their reserves in record amounts in 2018 and 2019, but buying slowed last year with the onset of the COVID-19 pandemic. The slower pace has continued into 2021, but buying is ahead of last year as many countries continue to load up on the yellow metal. The World Gold Council […]


Gold Flowing Into ETFs Again

In 2020, gold-backed ETFs recorded record net inflows of gold. Funds added nearly 231 more tons in 2020 than they did during the previous record year (2009/646 tons). But with declines in the price of gold and investors pivoting to riskier investments as economies improve, we’ve seen net outflows of gold from ETFs over the […]


The Demise of the Dollar?

Last week, Russia announced plans to completely eliminate dollars and dollar-denominated assets from its sovereign wealth fund. Is this another sign of erosion of dollar dominance? The news from Russia dovetails with a warning by billionaire fund manager Stanley Druckenmiller that the dollar could cease to be the world’s reserve currency within the next 15 […]


Central Banks Add Another 69 Tons of Gold to Reserves in April

Central banks globally added another net 69.4 tons of gold to their reserves in April, according to preliminary numbers compiled by the World Gold Council. Gold-buying by central banks slowed last year from the record pace we saw in 2018 and 2019. That trend has continued into 2021, but buying is ahead of last year’s […]


Comments are closed.

Call Now