Embattled UK prime minister Theresa May’s disastrous attempts to strike a Brexit deal, which led the resignation of cabinet ministers David Davis and Boris Johnson this week, has sparked a gold rush, acccording to investment firm The Pure Gold Company.
It said that it experienced a 237% increase in people purchasing physical gold earlier this week, following the resignation of David Davis and Boris Johnson. Over half of these clients investing in physical gold were financial professionals removing exposure to equities in anticipation of financial market volatility as political uncertainty increases, the company said.
The Pure Gold Company CEO Josh Saul said that enquiries throughout Monday evening through to Tuesday morning increased by 312%. “Our brokers continued working until 10pm to take orders,” he said.
“The atmosphere was reminiscent of the weeks before the Brexit referendum, and half of the same clients who purchased in the three days either side of the referendum in 2016 felt the UK is in store for a similar rollercoaster. In 2016, when the Brexit referendum was announced, sterling plummeted and gold increase by over 25% (overnight).
‘Confusion and uncertainty’
Saul said that the general sentiment right now is “confusion and uncertainty”, with many of the company’s clients purchasing gold worried that Theresa May, pictured above left, could be ousted out of office and replaced with someone in support of a hard Brexit.
“The lack of support for Theresa May from within her own party threatens the perceived stability of the UK government and some feel this will strengthen Jeremy Corbyn’s fight for power,” he said.
In a poll carried out by The Pure Gold Company in June, 72% of people polled believe that a hard Brexit will lead to a deep recession and result in considerable losses to their equity portfolio and pensions.