THE BLOG
27/12/2011 19:16 GMT | Updated 26/02/2012 05:12 GMT

How the Eurozone Crisis Really Affects Investors

Tullett Brown was founded in the midst of the financial crisis in 2009 to source commodities that were performing well in a depressed market place. As a result of this, they are one of the few City firms that were able to capitalise on the recent volatility in the financial markets.

Owing to the economic uncertainty surrounding the eurozone crisis, Tullett Brown has seen an 87% increase in the number of people looking into purchasing precious metals (compared to last year).

In 2010, only 1-2% of new customers approaching Tullett Brown already owned precious metals (either as collectors' coins or bullion, or as Exchange Traded Funds). This year that figure has already jumped to 9%, and Tullett Brown is predicting that in 2012 it will increase again to around 15-20%.

This begins to highlight the reality that the eurozone crisis has caused private individuals to lose faith in more traditional investment routes, and prompted them to protect their wealth by seeking alternative asset classes.

However, it's not just overseas issues which have affected the mind sets of private investors across the UK. As a result of the various rounds of quantitative easing, and thus the devaluation of the pound, an ever increasing number of people have turned to assets which will hold their value, causing a staggering growth in the sales of gold and silver.

In the wake of the Bank of England's announcement of the first round of Quantitative Easing, many of Tullett Brown's clients were able to purchase gold at between $900 and $1400. Since then, some of them have seen a growth of up to $1000 per ounce, which has naturally lead to a second wave of purchases as market volatility continues.

It is not just gold which has seen an increase in value in the current economic climate, however. Whilst in 2010 Silver was purchased by Tullett Brown's clients at $20 per ounce, it is currently trading at $33 per ounce, having hit a 31 year high in April 2011 (reaching $49.21 per ounce), again due to concerns over inflation and the uncertainty surrounding Eurozone bailouts.

Another interesting trend that has emerged out of the global financial crisis is the huge increase in the number of Tullett Brown's customers who wish to take physical delivery of the precious metals that they have purchased; increasing from 1% in 2010 to 10% in 2011. This can be seen as the ultimate 'sign of the times', with individuals wanting to be in possession of their assets, and tangible commodities rising as the new favourite over the once predominant equities.