Gold has not provided much protection against the market crash, but that is yet to dent investors’ enthusiasm, writes Henry Sanderson in the Financial Times. The yellow metal has fallen for the past two weeks and has now erased most of its gains for this year. Yet online gold exchanges report brisk business. Bullionvault.com says that net demand has not been this high since “the depths of the financial crisis in March 2009”.
The Pure Gold Company reports a 980% increase in Britons “panic purchasing” gold bars and coins over the past week compared with the weekly average.
“Usually clients have lots of questions about the market and how the investment works, but over the last ten days it’s been a question of how much can they buy and how quickly can they do it,” says CEO Josh Saul.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Experienced gold bugs will not be surprised by the metal’s recent pullback. The gold price also fell sharply during the early stages of the 2008 crisis, says Caroline Bain of Capital Economics. Investors tend to sell gold to cover losses or urgent cash needs elsewhere. After all, one of the attractions of gold is that it is a “relatively quick and seamless way to raise cash in times of need”.
It was only when the markets digested the implications of massive quantitative easing that gold went on a bull run from late 2008 that eventually peaked at $1,900 per ounce in summer 2011, notes Russ Mould of AJ Bell. If recent history is any guide, the launch of QE Infinity may be laying the groundwork for a repeat performance.
-
M&S and Tesco among those warning of a £7bn Budget hitSeventy-nine UK retailers have written to Chancellor Rachel Reeves about possible price rises and job cuts - here is what it means
-
How much does it cost to move home under the Labour government?Home-moving costs are rising and could get more expensive once stamp duty thresholds drop in April 2025
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsLooking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go? We round up the best investing apps
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
