There has been a sharp rise in demand for physical gold amid growing concerns over inflation, geopolitical instability and mounting political uncertainty in the UK, according to The Pure Gold Company.
The company has seen a 133% increase in investment bankers, lawyers, accountants and senior finance professionals purchasing physical gold bars and coins over the past four weeks, with recent weakness in the gold price increasingly seen as a buying opportunity.
Starmer uncertainty boosts gold demand
Joshua Saul CEO of The Pure Gold Company said “Customers repeatedly tell us they view the recent weakness in the gold price as a significant buying opportunity. Many believe the current price does not properly reflect the level of political and economic instability building beneath the surface.
“A growing number of customers are specifically referencing fears surrounding the political future of Sir Keir Starmer and the wider stability of the Labour government. Many are openly 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.”
Saul says that customers frequently compare the current environment to the political chaos that followed David Cameron’s resignation after the Brexit referendum in 2016. Between David Cameron stepping down in July 2016 and Rishi Sunak becoming Prime Minister in October 2022, the gold price in pounds sterling increased by approximately 65%.
“Many customers believe that rise was driven not simply by inflation, but by a broader collapse in confidence across politics, currencies, government stability and the long-term direction of the UK economy,” he explained. “Customers are increasingly telling us they fear many of those same conditions are beginning to reappear.”
First-time buyers surge as savers seek safety from inflation and volatility
Alongside domestic political concerns, The Pure Gold Company says customers are also citing escalating geopolitical tensions, rising government debt, stubborn inflation and concerns over the resilience of Western banking systems as reasons for turning to gold.
As a result, more people are investing in physical gold for the first time, with first-time buyers now accounting for 53% of The Pure Gold Company’s customers.
“Many report concerns over counterparty risk within the banking system, frustration that cash savings continue to lag behind the real cost of living, and worries that inflation will continue eroding purchasing power over the coming years,” said Saul.
Pension investors swap equities for CGT exempt gold
The Pure Gold Companyhas also seen a 318% increase in investors reducing exposure to equities within their pensions and SIPPs in favour of physical gold held inside the same tax-efficient structures.
“Unlike many traditional investments, UK legal tender gold coins can also be sold free from Capital Gains Tax for UK residents, while remaining highly liquid and easily convertible into almost any major currency worldwide.”
