Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

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.

WhyBuyGoldNowBanner.070815.590

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

What Are Gold Stocks Telling Us About the Gold Market?

The price of gold is up by about 2.7% so far in 2020. But gold stocks are down on the year. Why is this happening and what is this telling us? When we talk about gold stocks, we’re referring generally to stock in companies involved in gold mining and exploration. The valuation of these stocks […]

READ MORE →

The Dawn of the Dead on Wall Street

It’s like Dawn of the Dead on Wall Street. Zombies are everywhere. Even as stocks continue to push to new highs, the number of money-losing companies listed on US stock markets has ballooned to levels not seen since the dot-com bubble of the late 1990s. According to a recent Wall Street Journal article, nearly 40% […]

READ MORE →

Bridgewater: Gold Could Push Above $2,000 as Fed Ignores Inflation

Peter Schiff has been saying the Federal Reserve is going to let the inflation monster loose and this is going to be good for gold. Some people in the mainstream are starting to pick up on this theme. During a recent interview with the Financial Times, Bridgewater Associates co-chief investment officer Greg Jensen said gold […]

READ MORE →

Are Consumers Nearing the End of Their Road of Debt?

Are consumers getting close to the end of their road of debt? There are some indications that they might be and that’s not good news for an economy built on consumers spending money they don’t have.

READ MORE →

The Outlook for Gold in 2020 Remains Bullish

Gold had a strong year in 2019 and a World Gold Council report says the outlook for 2020 remains bullish. We expect that many of the global dynamics seeded over the past few years will remain generally supportive for gold in 2020.” Gold charted its best year since 2010 last year. The price increased by […]

READ MORE →

Comments are closed.

Call Now