Savvy investors flock to buy item that’s ‘safe’ | European Markets

As financial tensions rise worldwide, buyers are more and more turning to a tried-and-tested asset – gold.

Intensifying international inflation pressures and unsure financial forecasts have just lately led to hovering demand for the metallic.

Solomon World, a main provider of licensed gold and silver bars and cash, reported a dramatic surge in curiosity final month. The company mentioned its gross sales elevated by a staggering 98% in January 2025 in comparison with the identical period final yr.

Paul Williams, managing director of Solomon World, mentioned the asset is being seen as a “safe haven” from the nation’s looming ‘stagflation’ – a mixture of high inflation and low financial growth.

With the UK’s Client Worth Index (CPI) inflation fee surging to a 10-month high of 3% within the 12 months to January, Mr Williams mentioned issues have been “reignited” over persistent price pressures. The Financial institution of England forecasts inflation to hit 3.7% in the summertime after more of Chancellor Rachel Reeves’s price range measures come into impact, additional decreasing the buying energy of money. The bank additionally halved the nation’s financial growth forecast to simply 0.75% this yr.

Mr Williams mentioned: “With uncertainty clouding the UK’s long-term outlook and the spectre of ‘stagflation’ looming, investors are increasingly turning to gold as a safe haven. The metal’s historical role as a hedge against inflation and economic instability is driving demand once again.”

The knowledgeable famous that Google searches for ‘buy gold’ have jumped 52% year-on-year, which may replicate growing public curiosity.

Rick Kanda, managing director at The Gold Bullion Firm, added: “There’s no denying that 2024 was a record year for gold. It’s reached colossal new highs and broken records that none of us expected.”

He mentioned gold’s rise in gross sales is basically supported by continued central bank shopping for and geopolitical tensions that fuel market volatility.

He famous that one other issue doubtlessly making gold a profitable commodity to invest in is that all through any financial coverage adjustments, “it’s likely gold will continue to retain its worth during uncertain times.”

He added: “Recently, Trump’s presidency and Trudeau’s resignation have contributed to an environment of increased uncertainty and market volatility, which supports the likelihood of gold being viewed as a safe-haven asset. These factors have traditionally driven investors toward gold as a reliable investment during unstable times.”

Mr Kanda forecasts that by the end of 2025, gold could reach a new milestone of $3,000 per troy ounce.

Mr Kanda said: “Overall, it looks to me that 2025 will be another extremely successful year for gold investment that’s bound to be a part of many people’s investment portfolios.”