Gold's £800 Goodbye to Gordon Brown
Source: Adrian Ash, BullionVault (5/6/10)
Gold says "Goodbye" in fine style to the man who dumped half the UK's reserves.
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.
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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
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