Gold demand at Arabian Pure Goldhas surged in the last week as economic crises keep piling up. Hot on the heals of the cost-of living crisis has come a mini budget-induced currency slump, property market fears as interest rates rise, a national rebuke from the IMF, and stock market volatility, all of which are driving many people to safe-haven assets. Over the last 7 days, Arabian Pure Gold has seen a 412% increase in people purchasing physical gold coins and bars compared to the weekly average over the last year.
Josh Saul, CEO of the gold investment firm, said: “The general sentiment is bleak. Our clients are worried about not being able to keep up with the rising cost of their mortgage (as interest rates increase) in addition to energy and food bills. The collapse of the pound is weighing on our clients who have businesses that rely on imports (such as restaurants, retailers, green grocers), which are getting more expensive. Over 21% of enquiries over the last 7 days have come from people who plan to use the proceeds of property sales to fund further investments in gold and silver. They’re looking to sell in the next few months to avoid interest rates of 5 or 6% next year (which many have said they categorically would not be able to afford).
“Inflation, which is the rise in cost of commodities and services, could top 22% next year according to Goldman Sachs. By definition physical gold is a natural hedge against the rising cost of goods as it tends to increase (along with other goods or services). But it also serves to provide stability as a safe-haven asset when markets are uncertain, unpredictable and volatile, as they are now. Furthermore, as the pound falls it takes more sterling to buy the same ounce, so owners of gold will be able to maintain the purchasing power of their wealth.
“At a time when demand for physical gold and silver is the highest we have seen it (even higher than during the Brexit referendum and the onset of COVID), availability of UK gold coins is extremely low.
The death of the Queen sparked a surge in demand for coins, while it may also affect the striking of new ones as the Royal Mint prepares to replace the Queen’s effigy with one of King Charles III.
“Legal tender gold coins are Capital Gains Tax free depending on your individual circumstances, which is why over 96% of all gold purchases at Arabian Pure Gold (within the UK) are in the form of UK gold coins. The high demand / low supply environment for physical gold against a backdrop of a weakening currency, high inflation and uncertainty within all markets provides strong pressure for the yellow metal’s growth.
“That said, our clients are not purchasing physical gold to purely make money. It’s more about providing a hedge against inflationary pressures and security in a very uncertain world.”
