The Phaserl


Investors Piling into Gold as Safe Haven

by Elijah Johnson, Miles Franklin:

As turmoil heightens in the geopolitical scene, the world markets, and world economy, investors are seeing precious metals as the go to safe haven. Gold prices have risen over $150 per troy ounce, or about 15 percent, since the beginning of 2016. Precious metal dealers around the country are experiencing increased demand.

Investors bought $1.6 billion of precious metals in the second week of February alone. That’s the second largest weekly demand for precious metals in the last five years, Forbes reported.

“The best way to describe the events of the gold market for the first two months of 2016 are ‘fear’ and ‘flight to safety,’” senior writer for Gainesville Coins, a bullion distributor from Lutz, Florida, Steven Cochran said.

Managing Partner and Co-founder of bullion dealer Perpetual Assets Gus Demos says business has been strong ever since the equity markets in America and around the world started showing extreme volatility last August. But once gold and silver prices started rising at the beginning of the year, he said demand for precious metals grew even stronger. Demos estimates that business is currently double what it was last year at Perpetual Assets.

President and Co-founder of a Minneapolis based precious metals dealer Miles Franklin Andrew Schectman said “We are witnessing a really strong demand actually, as strong as I can remember in many years.”

Schectman said business has increased at his company 15 to 20 percent from last year.

People are investing in precious metals because they want protection from a further stock market crash, said precious metal analyst and commentator Bill Murphy.

“Stock markets are under pressure all over the world,” Murphy said, “people are concerned that all of a sudden their equity that they’ve saved all their lives for…all of a sudden is disappearing.”

Cochran, Schectman, and Demos all noted that recent talk of implementing negative interest rates around the world also has been bullish for precious metals.

Although not a reality yet in America, negative interest rates are being tried by central banks in Japan and European countries. As for the bond market, Bloomberg reported $7 trillion worth of government bonds have a negative return.

“Negative interest rates completely remove one concern cited by detractors of physical gold – that it doesn’t pay interest,” Cochran said.

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