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-- Posted Thursday, 6 August 2009 | Digg This Article | | Source: GoldSeek.com
The UK’s Royal Mint doubled its production of sovereign gold coins in the first half of 2009 as British retail investors snapped up a hedge against inflation that does not attract capital gains tax as a coin of the realm. Bloomberg News extracted the data under a Freedom of Information Act request. The Royal Mint output climbed from 8,030 ounces in the second quarter of 2008 to 16,910 ounces for the comparable period this year. For the first half of 2009 production surged 86 per cent to 45,406 ounces. Gold ETFs It has been the same story for exchange traded funds, often seen as a more convenient and safer way to hold gold. The largest SPDR Gold Trust saw first half gains of 74 per cent and held 1,120 tonnes. However, the capital gains tax on ETFs has limited their investment appeal to retail investors, although they can be included in certain government approved tax-free investment schemes. Hedge funds have been the big buyers of ETFs this year with Paulson & Co emerging as the most high profile new backer of the yellow metal. The fact that the fund that made billions betting against subprime lending is now hot for gold is clearly a significant market indicator. On the other hand, gold investors may still need a little patience. Any correction from the current stock market rally will probably involve a sell-off of all asset classes. Dr Doom Author of ‘Tomorrow’s Gold’ and a gold buyer since 2001, Dr Marc Faber says in such circumstances the gold price could dip to $850 an ounce compared with $960 at the time this article was posted. He sees that as a buying opportunity, particularly for gold equities. But retail investors could find themselves with big rewards as governments are likely to respond to any further financial market upsets with more stimulus plans. This will accelerate fears about dollar devaluation and could crash the bond market sending investors piling into precious metals. In a gold rush gold prices could reach $2-3,000 and silver $100 an ounce. Certainly holding gold and silver in a portfolio at the present time makes good sense, and that is presumably why so many retail investors are now hoarding gold sovereigns.
-- Posted Thursday, 6 August 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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86% Surge in Gold Sovereign Production in UK
