Gold's £800 Goodbye to Gordon Brown

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Gold says "Goodbye" in fine style to the man who dumped half the UK's reserves.

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.

Adrian_Ash_Gold

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.

Adrian Ash
BullionVault

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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 editor of Gold News and head of research at BullionVault—winner of the Queen's Award for Enterprise Innovation, 2009—where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events—and must be verified elsewhere—should you choose to act on it.

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