Over six years ago the price of gold reached an all time high : – in July 2011 gold was selling on the London markets at $1,837 an ounce. At the end of 2016 the price of gold had dropped to around $1.1200 an ounce – but since the start of 2017 we saw a gradual rise in the gold price back to around $1,346 an ounce in September. The past month has seen a fall in gold prices to around $1270 an ounce. (Nov 1st 2017)
Many private small time investors are keen to keep some of their assets in gold . According to Bullion Vault , which operates vaults in London, New York and Zurich there has been a ninefold increase in the number of gold bullion traders in the past five years.
People decide to put their hard-earned money into physical gold for many reasons. In the main it’s to diversify away from other investment markets, to hedge against inflation or as a ‘crisis insurance’ against possible financial instability. With Brexit and the Trump presidency – there could be some instability on the way in the next couple of years.
Central banks around the world hold about 12% of their reserves in gold. The US has the biggest hoard of gold, followed by Germany and the International Monetary Fund. If jewellery is included, India has the largest amount of gold within its national boundaries.
The amount of gold left underground could soon run out. At the end of 2005 the big gold producers calculated their reserves at 22,000 tonnes – or 14 years’ production. In reality, it is likely to be more, as new reserves are discovered.