The Continued Robust Demand for Physical Gold

The Royal Mint in England has reported a “surge” in demand for physical Gold right after the Bank of England cut its base rates to 0.25% on August 4, 2016. Immediately after this reduction, the Mint encountered a 25% increase in purchases on its bullion website. It also encountered a 50% increase in the sales of gold bars and coins over sales of these same products during the previous week.
 
Ordinarily, investors will default to bonds and other interest-bearing investments for automatic income. But in times like these, when interest rates are suppressed, these same investors will take advantage of a price increase in gold.
 
This year, gold has risen 25% in dollar terms. But in pound-sterling terms, it has risen 45%. The Brits have been going through an economic shock following the June 23 Brexit vote.
 
Physical GoldWhile many UK citizens welcomed the split and remain optimistic about their country’s economic prospects, they will still endure a period of economic uncertainty. The UK will have to invoke an agreement know as Article 50 of the Lisbon Treaty. Under this agreement, the UK and the European Union will have two years to iron out the specifics of the separation. During this period of uncertainty, it’s now clear demand for gold could very well flourish.
 
Meanwhile, in its quarterly report of gold trends, the World Gold Council reveals a 15% growth rate, or 2,335 metric tons, which brings this growth rate to the second highest first half of the year on record. Record investment demand of 1,063.9 for the first half of 2016 was actually 16% higher than the previous first-half high in 2009.
 
It’s notable too that investment was the largest element of demand for gold during the first two consecutive quarters of this year. This is the first time on record for this phenomenon.
 
In a July 31, 2016 Bloomberg interview, Perth Mint CEO Richard Hayes reports that gold demand is “holding up well.” When asked whether ETFs are absorbing much of gold demand, he points out that a gold ETF investor is buying a “share of a trust.” And, therefore, Hayes mentions, you don’t actually own physical gold through an ETF.
 
Investors in the actual physical metal should also appreciate their yellow metal is negatively correlated in price to other investments like stocks and bonds. As such, it’s a splendid hedge against inflation, because the prices of stocks and bonds inflate in tandem with the U.S. dollar.
 
So now that the demand for gold has become more acute, and the price still has plenty of room to move up soon, let us recommend you act now to get involved.
 
For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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