Three days ago, when Wall Street was virtually certain that the Brexit vote would comfortably go in favor of the Remain camp, the best tell about the true sentiment on the ground had nothing to with polls, or manipulated bookies' odds, and much more to do with our report that worried British savers are scrambling to buy gold bars and "stuffing them in safes at home, data suggests, as fears mount that a Brexit-induced financial meltdown could be just around the corner."
To all those who did convert their soon to be far less valuable pounds sterling into physical gold, and in the process avoided a record devaluation in just one day, congratulations.
However, it turns out that many more did not. And as gold soared overnight, having its best day in years while cable was tanking, suddenly everyone else also had the epiphany that the only true money that preserves its value regardless of the stupidity of politicians or idiocy of central bankers, is gold.
As the Telegraph reports, by 11am London time, BullionVault users had traded £23.5m of vaulted gold and silver since midnight - more than two weeks’ worth of average trading in 2015. And, showing the scramble by the public to buy gold, new account openings by 11am were already twice this year’s daily average.
But it was about to get much worse, or perhaps, batter.
According to Google, the number of internet searches for the phrase "buy gold" spiked by 500% after the Brexit results trickled through around 5am. Investors flocked to the safe haven asset during Asian trading while the pound plummeted to a 31-year low.
+500% spike in searches for "buy gold" in the past four hourshttps://t.co/pmMsRUcAwK
— GoogleTrends (@GoogleTrends) June 24, 2016
Today, as is customary after the fact, everyone was euphoric on gold: "gold could rise to $1,400 whilst other precious metals such as platinum, offer attractive fundamentals," said James Butterfill, head of research & investment strategy at ETF Securities. Virtually every other investment bank followed suit and even Goldman came out, when the traditionally goldophobic bank had no choice but to raise its gold price target following today's meteoric gold surge.
Which is great, however all of it was, as noted, after the fact.
The truth as all those who buy gold after the devaluation learn, is that for gold to be a store of value and preserve purchasing power it has to be acquired before some catastrophic, devaluing event, which as yesterday's Brexit showed, tends to be utterly unpredictable.
The good news, of course, is that as the vast majority of the population still expresses little to no interest in the one asset that protects against loss of purchasing power and unlike stocks, is not merely a bunch of 1s and 0s in some server in some warehouse in the middle of nowhere and whose chain of ownership is constantly exposed to counterparty risk, physical gold is and always will be "right there." A fact which continues to amaze how few actually understand.