Jump in investors turning to gold amid wider market uncertainties

A jump in gold investments has been recorded by the Royal Mint, amid wider market uncertainties.

The Mint saw a 26% annual jump in the volume of gold investments made last year, with younger adults driving the uplift.

Gold bar investments in particular increased last year, with sales rising by 33.5%, the Mint said.

It added that the rise in gold investments was driven by Generation Z and Millennial customers, who increased their volume of purchases by 38% and 29% respectively in 2022.

Nearly a quarter (23%) of investors plan to invest in gold this year, according to a survey of more than 2,000 UK investors commissioned by the Mint and carried out by Censuswide.

Gold was found to be the second most likely investment people were planning to make this year, after UK stocks and funds.

Nearly one in six (16%) investors who had not previously invested in precious metals before were planning to do so in the future.

Gold, which is seen as a “safe haven” by some, hit a nine-month high in January this year – and the Mint said it saw a 230% week-on-week jump in sales of gold investments in the week starting Monday March 13.

However, the value of investments can go down as well as up. Having a diverse portfolio and dripping money into investments over a period of time can help to manage risk.

People may also want to take independent financial advice when deciding whether to make investments.

More than half (52%) of investors surveyed for the Royal Mint were worried about market volatility impacting their portfolio this year and a similar proportion (55%) were concerned about inflation impacting their investment portfolio.

Andrew Dickey, the Royal Mint’s director of precious metals, said: “At the Royal Mint, we are seeing more investors consider, and invest in, precious metals as a potential means to protect their portfolios and attempt to navigate volatile market conditions.

“From our experience, gold and precious metals grow in popularity during challenging times for the global economy as investors look to diversify their portfolios and hedge against inflation.”

Meanwhile, gold bullion savings app TallyMoney said it welcomed nearly 20,000 new customers in 2022 and the number of accounts it has seen being opened has jumped by 48% since the start of March.

Investments with Tally are held in gold and when money is withdrawn it is converted back into sterling.

Cameron Parry, chief executive of TallyMoney, said: “The past few weeks haven’t just delivered a surge in the number of people looking to save in gold; they’ve also shifted people’s reasons for doing so.”

TallyMoney customer Sean Kelly, 63, from Leighton Buzzard in Bedfordshire, said: “Gold has performed very well against the pound in 2022, and because I’m an engineer I’ve enjoyed creating my own spreadsheet with trendlines and averages which acts as a trigger for when I should be buying bullion.”

Investments held with the Royal Mint and TallyMoney are not protected by the Financial Services Compensation Scheme (FSCS), which compensates savers when their bank or building society goes bust.

The Royal Mint said investments are fully insured and stored at its vault facility. In the case of the Royal Mint, metals are directly owned by the customer and the Mint is the custodian.

TallyMoney’s website says money in accounts represents real physical gold vaulted on behalf of and beneficially owned by its customers.

TallyMoney also said that, while it is not covered by the FSCS, it is not limited by the FSCS’s £85,000 compensation cap either. It added that it does not leverage or lend out customers’ savings.

Here are some general considerations outlined by Mr Dickey for people considering investing in precious metals:

1. Someone can invest in physical coins and bars, or digitally. While some people may aspire to owning gold bars, there are several ways to invest, including potentially more affordable routes such as owning fractional amounts via digital gold products.

2. Many precious metals investments include a “premium” on the product. This is the percentage charged for the product, over the price of the metal which it contains. Due to economies of scale, smaller products may cost slightly more to manufacture, package and distribute.

3. Markets can be volatile, rising and falling quickly. If someone is thinking of investing, it is important to consider how long they intend to invest for. By investing over the long term, someone may be able to ride out any market dips.

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Jump in investors turning to gold amid wider market uncertainties

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