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Brexit sparked explosive gold price surge

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With the score-line at 0-0 nearing full-time, Brexit voters unleashed an unstoppable volley past the “Remain” goal-keeper and claimed an unexpected victory on 23 June 2016. UK has chartered into unfamiliar horizon. Government officials, analysts and economists were all dumbfounded by the results as most of them expected UK to remain part of European Union. In the midst of the chaotic situation, Brexit sparked an explosive gold price surge as expected.

Flight to Safety

At one point, when the Brexit was released, gold price stormed past USD1,300 per ounce as investors bolted to park their wealth in the safe haven amid carnage in the global currencies. Notably, Euro and sterling pound suffered record meltdown as investors flee for safety. Their concerns were not unfound as UK is the world fifth’s largest economy. Decoupling from European may have deep implications in terms of trade and military cooperation.

Whilst it is easy to argue that UK voters had let their emotions ruled their heads, it should be highlighted that the issue of immigration has always been sensitive in an open economy like UK. Many global leaders and analysts grossly underestimated that ground sentiments can swing the voting results, even though there are a lot at stake, in terms of political and economic stability. This is because when it comes to voting, personal interests always come before national interests.

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Reason for “Leave” 

No doubt European Union (EU) is a massive bloc that allows UK to have access to a market of more than 300 million people and global investors had always regarded London as the gateway to trading with Europe. But such privilege also comes with conditions as UK is obliged to meet EU’s immigration and economic policies. Under the EU regime, UK residents are hapless against the massive influx of immigrants from less developed EU countries looking for employments. This is the main reason for so many “Leave” voters.

Crisis looming?

It is still early days of Brexit and the market is still in a state of shock. At one point, the Sterling dropped by a jaw-dropping 11% against the US dollar, sending the currency market into a tailspin. Many analysts and naysayers have come out and commented that this is just a knee-jerk reaction. They doubt that this is the start of a major financial crisis.

As a wealth builder, I reserve my judgement on whether Brexit would be the onset of a financial crisis. Very often, analysts and politicians got it all wrong when it comes to forecasting economy downturn or political changes. Brexit is a classic example.

Instead of worrying whether a crisis is looming or not, why not start to take actions? Review your portfolio and start to diversify your investment risks. There are signs that the global stock markets are ripe for major corrections. China fired the first salvo in earlier part of this year and now Europe’s stock market is facing the same predicament.

Given the volatile currency and stock markets, investing in stocks and holding too much cash may not be prudent. Instead, consider to buy precious metals like gold and silver bullion in Singapore during this uncertain times.

In Singapore, you can choose to buy physical gold from BullionStar, one of the largest online bullion dealers with a store-front shop at 45 New Bridge Road. With BullionStar, you can choose to buy gold or silver bullion online and have them delivered to your home or put them into ‘My Vault’ storage in BullionStar’s secure vault storage facility. Alternatively, you can choose to walk in and buy gold and other precious metals at BullionStar shop and showroom premises.

Gold and Silver Bullion

Gold and Silver Bullion

Setting up an online account is pretty simple and you can choose to pay in different currencies, including Singapore dollar and Bitcoins. In addition, the price is very transparency as BullionStar’s website displays the price premium and spread for each bullion. This allows buyers to make price comparisons online before making the purchase.

BullionStar also offers customers their own minted gold and silver bars with zero spread. They have commissioned world-renowned LBMA-approved Swiss gold refiner Argor-Heraeus to produce these stylish and unique minted 100 gram 99.99 % purity gold bars.

Below are some gold bullion offered by BullionStar that are worth buying:

  1. PAMP Gold Bar – 1kg
  2. American Gold Buffalo Various Years
  3. BullionStar Mint Gold (No Spread)

Singaporeans who still think that they can win the stock market should wise up. The matter of fact is that the odds are stacked firmly against retail investors and those who did not diversify their portfolios are taking on big risks. Just one market correction and their wealth would be gone. Instead of risking your hard-earned money on speculative shares, start buying real physical gold from a trustworthy bullion dealer.

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SG Wealth Builder

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Updated: December 25, 2016 — 3:12 pm

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