As Britain goes to the polls, gold says "Goodbye" in fine style to the
man who dumped half the UK's reserves on the market in May 1999...
HOW SWEET of gold to mark Gordon Brown's last day in power with a new
all-time high against the Pound Sterling.
He did so much, short term, to dent the former. But his famous "prudence" -
in truth, an abject misreading of both economics and history - has in fact
worked to destroy the latter instead.
Perhaps today's valedictory jump...leaping 3.7% to touch £805 an ounce...was
just one last blow-off to mark Brown's political passing. But the gold
price in Sterling looks more ironic than toppish given his legacy of debt.
The man who sold over 55% of the UK's reserves 11 years ago - advising the
market two months in advance so it could get itself short...and in fact lending
out one-fifth
of the UK's total reserves* so gold-sellers could do precisely that, as
well - had come to power with gold trading around £200 per ounce.
But rather than leaving gold prices lower...as his ill-advised sales (well,
Goldman Sachs-advised, in fact) did at first...the Irn-Bru chancellor has instead
given long-term British gold buyers 23% gains for every year of his prudence.
Cheers, Gordon! We might (grow to) miss your smile. Thanks to your fiscal
incontinence, however, it should be a few years yet before we miss your impact
on gold.
Formerly City correspondent for The Daily Reckoning in London and head of
editorial at the UK's leading financial advisory for private investors, Adrian
Ash is the head of research at BullionVault,
where you can buy gold today vaulted
in Zurich on $3 spreads and 0.8% dealing fees.
About BullionVault
BullionVault is the secure, low-cost
gold and silver exchange for private investors. It enables you to buy and sell
professional-grade bullion at live prices online, storing your physical property
in market-accredited, non-bank vaults in London, New York and Zurich.
By February 2011, less than six years after launch, more than 21,000 people
from 97 countries used BullionVault,
owning well over 21 tonnes of physical gold (US$940m) and 140 tonnes of physical
silver (US$129m) as their outright property. There is no minimum investment
and users can deal as little as one gram at a time. Each user's unique holding
is proven, each day, by the public reconciliation of client property with formal
bullion-market bar lists.
BullionVault is a full member of
professional trade body the London Bullion Market Association (LBMA). Its innovative
online platform was recognized in 2009 by the UK's prestigious Queen's Awards
for Enterprise. In June 2010, the gold industry's key market-development body
the World Gold Council (www.gold.org) joined
with the internet and technology fund Augmentum Capital, which is backed by
the London listed Rothschild Investment Trust (RIT Capital Partners), in making
an $18.8 million (£12.5m) investment in the business.
Please Note: This article is to inform your thinking, not lead it.
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