Demand For Gold Soars As Investors Seek A Safe Haven Amidst Market Chaos

Date: Mon, 23 March 2020

Author: Jeff Prestridge



 It is unclear as to which direction gold price is heading to. However, the precious prominence as a safe haven or refuge in distressful times and alarming seasons are resulting in a demand of record investors.


BullionVault [a precious metal dealer], expressed demands this month from investors for gold has been massive ever since the depths of the global financial crisis in early 2009.


Compared to the average of the past year, the number of investors opening new accounts is in estimation three times greater, surpassing significant gold-buying sprees in the past. Such as during the 2016 Brexit vote and September 2011 when the euro crisis raged and London was involved in protests.


Adrian Ash [director of research at BullionVault], stated: 'With acute economic disruption crushing share prices, gold is gaining appeal as a rare, physically indestructible asset that people worldwide use to store value during times of crisis.'


In the recent year, gold in pounds has marked up with an increase of in estimation of 30 per cent to about £1,281 an ounce. Undeterred by the pandemic, gold price has only fallen back a little from its February high of £1,304 an ounce.


Nearly all investment experts have no doubt that the asset class remains appealing. Vincent Ropers, joint manager of investment fund wise Multi-Asset growth which invests in a combination of equities, fixed interest bonds, alternative investments and cash said: 'In volatile times, gold remains one of the few areas where investors can find cover. With the level of fiscal stimulus, we are starting to see around the world – a measure that ultimately will be inflationary – gold also offers a good hedge.' 

Ropers continues, 'Price volatility is not unusual in the early stages of an economic downturn.'  He holds faith that the current fluctuations in the price should not deter or scare investors.  'In the financial crisis of 2008, for example, the gold price did not respond straightaway until starting a three-year rebound that saw the price shoot up by more than 150 per cent.'

Sebastien Galy, [an economic strategist at Nordea Asset Management] stands on the same page. He reckons gold 'should do well' in 'an environment where central banks globally are printing money on a large scale' and inflation rates will rise. 'It is the type of narrative on which gold feeds,' he adds.


Gold can be acquired via merchants such as Baird & Co, BullionVault, Sharps Pixley, The Gold Bullion Company, The Pure Gold Company, The Royal Mint and Spink.


For an instance, the purchase of £10,000 of gold online through BullionVault initially costs 0.5 per cent, plus 0.36 per annum to store. The sales fee would be 0.5 per cent if to be sold after a year. Total fees of around £136.

Currently, a one-ounce minted gold bar (bullion) from The Royal Mint costs about £1,380. With gold worth at £10,000, the annual vault charge would work out at about £120, although it could be higher if gold prices continue to rise. The Royal Mint's website displayed a memo warning of delayed delivery times last week though.


Instead of buying physical gold, investors can purchase a stock market-listed exchange traded commodity whose performance tracks the gold price. One such vehicle is iShares Physical Gold that is included on the list of wealth manager Inter-active Investor's top 60 investment funds. 


Keyword :, Sterling House Trust, SHT