Britons are racing to buy gold as they panic over inflation, the Iran war, the Labour leadership contest and a potential sterling crisis. The Pure Gold Company reports a 133% increase in sales to financial professionals buying physical gold bars and coins amid fears of looming political and financial instability.
Gold is often touted as a safe haven but the price can be highly volatile. The gold price rocketed to an all-time high of $5,589 in January, but has since fallen sharply, and trades at around $4,540 today. Many see the recent dip as a buying opportunity, said Pure Gold chief executive Joshua Saul.
He said: “They believe the current price does not properly reflect the level of political and economic instability building beneath the surface.” Saul said a growing number of buyers are also citing political concerns in the UK, as leadership candidates battle to replace PM Sir Keir Starmer.
“Many are questioning whether the UK could once again enter a period where nobody knows who will be leading the country by the end of the week.”
A growing number are now investing in physical goals for the first time, accounting for more than half of recent purchases, amid fears that inflation will erode the purchasing power of their cash savings over the coming years. Many savers are also shifting money out of pensions.
Buying physical gold brings tax advantages, Sau added. “UK legal tender gold coins can also be sold free from capital gains tax.”
Exchange-traded funds are also a popular way to invest in gold, as they simply track the price of the precious metal. They can be bought inside a tax-free ISA.
Investment advisors suggest that most people should invest no more than 10% of their investable wealth, as the gold price can be volatile as well. In volatile times, it pays to be diversified across key asset classes such as cash, shares, bonds, property and gold.