Gold shines brightly in these dark times as investors flock to 'safe' buy

Gold saw its price soar over 1.5% notching its highest increase in more than seven years earlier this week, as investors moved towards the precious metal’s traditional safe-haven focus on fears of an extended recession and gloomy corporate earnings.

The rise surpassed $1,700 to touch its highest point since December 2012. A new Irish bullion company has achieved 70% of its yearly target in the last three weeks of trading as investors rush to the precious metal. Core Bullion is led by Nigel Doolin who feels that both dealing in physical gold and guaranteeing to repurchase any product sold will be a market winner.

“People will always buy your gold when the price is low, but when values rise it can be a different story — and a common one in the industry,” he said. Doolin has been dealing in gold for a decade and was previously head of trading with Merrion Gold, a business he headed up from inception seven years ago.

“People investing in gold need to know that they can capitalise on their asset and sell when the market is strong.

“This is not always the case with other companies, but we guarantee that we will buy back any gold that we sell at the market rate — no-one else is doing that at the moment.”

He adds that the company has done over 70% of its yearly target in the past three weeks’ trading, and stresses that those investing in gold for the first time should avoid coins and ensure that they buy bars. “A one ounce coin will generally cost more than €30 to €90 extra per ounce — but you will never get that extra value back,” he said. “When you come to sell, you will generally only get the weight price of the gold — in essence you are paying for the collectors’ value of coin, which is a very specific market.”

It is also important to get physical gold, he advises: “This is not always the case, and if an institution or a government collapses, so does your piece of paper.”

The minimum advised purchase is a one ounce bar, at around €1,550, which can be stored by the client or in a safe deposit box, arranged at a reduced rate for Core Bullion clients.

“Gold is about security in uncertain times — if you are getting into it for the first time, look at the steady rise over the past 20 years,” he said. “It has historically been a safe haven investment option as well as a good diversifier during market dips, since it enjoys a very low correlation with other asset classes such as equity and debt.”

He cites the 2008 financial crash, when the ISEQ fell by 66% while gold prices rose by 31% at their peak.

“The performance of a diversified portfolio — equity, debt and gold — as against standard diversification of equity and debt and standalone asset classes shows that it generates higher risk-adjusted returns.”