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Fearing a total collapse of the European Union if the United Kingdom successfully leaves, American billionaire George Soros has been pouring investment into gold to hedge against an economic collapse.
Bitcoin, gold, European Union, United Kingdom, Brexit
Fearing a possible EU collapse, and attempting to diversify away from a volatile dollar, billionaire George Soros has begun heavily investing in gold stocks.
According to a Wall Street Journal article, Soros Fund Management, the $30 billion fund which oversees Soros’s investments, made a series of large investments into precious metals. Soros bought a $264 million stake, or 1.7% in Canada-based Berrick Gold, while cutting investments in US-based stocks by one third.
Soros is aligning his investments with precious metals in reaction to the potential collapse of the EU if “Brexit” is successful and the United Kingdom leaves the Union, according to the billionaire.
Soros told the Wall Street Journal:
“If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable. I’m confident that as we get closer to the Brexit vote, the ‘remain’ camp is getting stronger. Markets are not always right, but in this case I agree with them.”
British citizens, seeking economic security when faced with a potentially successful exit vote, flocked to gold during June, causing Royal Mint sales to soar by 32%. As expectations for the impending vote shifted to remaining in the EU, the price of gold slipped to a two-week low on Thursday.
During turbulent times of low confidence in governments, financial systems, and the global or local economy, investors turn to precious metals for financial stability.
Recently, however, Bitcoin has joined gold as a popular “hedge” against unstable times. Brexit has illustrated this trend.
A new chart from Bloomberg tracks the price of both gold and Bitcoin against polling for the UK to remain in or leave the EU. The chart shows the price of both closely tracking polling for Brexit, peaking as estimated probability of leaving the EU was at its highest in mid-June, and falling as that probability waned later in the month.
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