When the economic climate faces uncertainty, the conservative investor looks to precious metals like gold and silver as a safe haven. This is an entirely justified strategy. The Romans said that an ounce of gold would buy a man a fine suit of clothes. Considering that an ounce of gold right now will set you back over £500 – it’s easy to see that it has easily kept its intrinsic value. It is unsurprising that gold and silver dealers are currently seeing unprecedented demand from private investors. After all, a share in a company can literally become worthless overnight – but if you have an ounce of gold (as long as it’s in a safe place) you’ll always have something of worth.
This does beg a question though:
What was the rationale behind Gordon Brown’s decision to sell off our gold reserves eight years ago, when the price of gold was at a twenty year low? Hardly prudent!