By Lina Saigol and Ryan Weeks
Gold-buying apps, which allow customers to buy and use the precious metal for everyday spending, are seeing record volumes as investors flock to the safe-haven commodity amid violent market swings on fears of a coronavirus-fueled global recession. British-based startup Glint Pay Services, which operates in the U.S., the U.K. and continental Europe, said it had seen a 718% increase in clients purchasing gold over the last five weeks as volatility stemming from the coronavirus pandemic swept through markets. “Sales are going through the roof,” Jason Cozens, founder and CEO of Glint told MarketWatch in a telephone interview. “We are breaking records everyday.”The average gold purchase per customer has increased in the last five weeks to £2,739 from £1,373, Cozens said.
“Customers can buy as little as 1 cent of gold to more than $1 million and use it to buy anything from a coffee to a car,” Cozens said. “Gold is the ultimate form of money.”
To date, Glint, has more than 74,000 app downloads, “tens of thousands of registered users” and more than £69 million in transacted volume. It has plans to launch the app in Asia.
The company will roll out person-to-person payments to clients within the next couple of months so that everyone can send gold in lieu of currency payment “as easily as sending a text,” Cozens said.
Gold trading volumes at Goldex are also soaring, up 125% in 2020 compared with last year, and in a month-to-month comparison to March 2019 the amount of gold buys and sells has increased by a staggering 1,600% with a week left to go in the month.
Launched in London in 2018, Goldex’s app, which is available for both iPhone and Android, links users with the world’s biggest gold peer-to-peer markets, in London, Zurich, New York, Toronto and Singapore.
“Overall we’re seeing a substantial increase in gold demand in the first three months of the year, with this month already surpassing our previous record which was set in January 2020,” Goldex told MarketWatch. “We’re also seeing a significant increase in customers, with user registrations up 35% since the beginning of the year as investors flock to safe-haven assets amid plummeting stock markets,” the company added.
According to Goldex, the price of gold in 2020 has risen by approximately 20%, moving from £1,144.42 an ounce on Jan. 1 to a high of £1,384.56 on Tuesday. That marks a seven-year high for the precious metal after another positive performance in 2019, where gold rose 20% against the U.S. dollar despite a strong year for the U.S. equity market. Since January 2019, Gold prices have increased by almost 38% overall against the pound, and approximately 25% against the U.S. dollar.
Glint’s investors include a number of financial heavyweights, including the Tokyo Commodity Exchange; Nicholas Silitch, chief risk officer of Prudential Financial; Hugh Sloane of the hedge fund Sloane Robinson; and veteran BlackRock fund manager Evy Hambro.
In 2019 Glint successfully defended itself from a hostile takeover attempt that placed the company into administration by out an-of-court appointment without a hearing. The hostile party had purchased a Glint loan that wasn’t due for repayment until January 2020 and sought to use its position as a lender to achieve its aims.
The interest and fees had already been paid. Glint achieved a solvent exit, having raised funds to repay the loan early, plus all creditor, and the administration costs. Glint is now back growing the company with the full support of its shareholders.
Revolut joined the gold app rush earlier in March when it launched a feature allowing customers with certain types of account to access gold through its app.
The U.K.-based digital bank said subscription users can purchase and trade gold, based on live market-performance data, which it obtains through its trusted gold-services partner, the London Bullion Market Association. Gold exposure can be transferred from one Revolut user to another via the Revolut app, or converted instantly into cryptocurrency or into e-money for purchases.
The fintech charges a 0.25% markup when gold is traded during market hours and a 1% markup outside of market hours.