Margareta Pagano: Ready, steady...the online gold rush is set to go
Precious-metals 'shop' expects explosive demand
Sunday 24 April 2011
In three weeks' time, readers of this column, wherever they are in the world, will be able to shop online at sharpspixley.com, for gold and silver.
You'll be able to buy chunks of gold, the size of a large thumbnail, for as little as £200 or an ounce ingot for around £1,000, or, if you can stand the weight, a 5kg bar of silver for £5,000. The precious metals are stored at a "high-value fulfilment" depot owned by Amazon at a secret address in Britain, and will be delivered to your door either by special delivery or by post.
It will be the first time that gold and silver can be bought so easily and openly online by the public. Sharps Pixley's new "shop" is the brainchild of gold expert Ross Norman. He's always been irritated that buying gold is for the experts or dentists, and made difficult for Joe Public because of the lack of access, fears over money-laundering and worries that the gold might come from mysterious places – such as crematoriums.
He wants to make gold as easy to buy as jewellery or an iPad. He bought the Sharps Pixley name to give the venture authenticity – the gold bullion trader dates back to 1778 and was one of the original members of the gold-fixing circle. Norman finally got the credit-card approval for the venture last week; just as gold soared to another record-breaking high of $1,500, and silver futures hit a 31-year high.
So is Norman too late? Has the madness of crowds driven gold to the top? He doesn't think so. Gold has risen five times over the past 10 years, and 30 per cent last year. The latest spike is being fed by fears of higher inflation, the falling dollar as the US digests its deficit, the volatility of currencies, low interest rates and Europe's sovereign-debt crisis.
Norman – whose forecast of $1,500 I carried at the beginning of the year – is confident that gold will continue to gain value and now thinks it could make $1,850 by the year end.
Demand is as long as your arm – especially from China and India – and there's no immediate need for anyone to sell. As the economic crisis turns into a social one, with real incomes being sliced and inflation on the rise, people are following their raw instincts to find safe homes for what wealth they have. Put these factors together, and there's no reason the bull-run shouldn't continue.
Indians are the third-biggest buyers of gold in the world, and the Chinese, with inflation roaring, are picking up the habit as they look for a safe haven for their money. In the West, the Germans have been behind recent buying; their memories are long and they've had their wealth wiped out by two wars in the past 100 years.
Here in Britain, retail demand is nascent but Norman expects it to be explosive. He's already had orders from potential buyers, mainly women who are buying gold for investment rather than gifts.
Intuitively, investors know it's still the safest bet. A recent survey showed that one in five of young savers – those in their 20s and 30s – keep their cash under the bed. The reason? They can't earn decent interest in the banks and are nervous about investing in the stock market or currencies. Finally, they said they don't trust the banks. That's why the smart money is still going for gold.
The Name's Fayed: Mohamed's Pinewood pitch echoes Dodi's passion
It's no surprise that Mohamed al-Fayed is the mystery suitor for the Pinewood Shepperton film studio, home to the James Bond and Pirates of the Caribbean films. The former owner of Harrods has long been a film-lover, mainly because of his son, Dodi, who died with Diana, Princess of Wales.
It was Dodi who triggered his father's interest after getting to know Barbara Broccoli – the daughter of Hollywood's Cubby Broccoli, legendary producer of the early Bond films – whom he met on the set, filming in Sardinia, when they were teenagers. (Fayed had provided an oil tanker for the movie.) Dodi's enthusiasm for film continued, and he made his own, Breaking Glass, now something of a cult favourite. It was he who took the script of Chariots of Fire to his father who then financed the Goldcrest blockbuster. Shares in Pinewood soared on the news last week, but Fayed will have to dig deep to top the £87.8m offer from Peel Holdings already on the table. I'm told Fayed, a Michael Jackson fan, is really keen to find a new project to throw his heart into, so expect some fun. And Pinewood would be a fitting memorial to his son.
One set of economic figures will decide if April has been glorious or cruel
The birds are in full song, the barbeques are sizzling and Britain is at its most glorious. Just about everyone is taking a few days off and even die-hard republicans might wish the young royals well.
The stock market, too, is in good spirits: the FTSE 100 is up 5 per cent so far this month. Despite gloom over the spending squeeze, the Office of National Statistics said last week that sales rose an encouraging, albeit tiny, 0.2 per cent in March compared with February's 0.8 per cent fall. The figures also showed public sector net borrowing fell short of the Office for Budget Responsibility's forecast during the 2010-11 financial year, coming in at £141.1bn against £145.9bn.
Is it all too good to be true? Perhaps. There was worrying news from the Bank of England which warned that while British exports have recovered the ground lost since the recession, imports remain stubbornly high. And the UK is now a net exporter of services but importer of goods.
A survey by the Bank's agents shows that domestic substitutes for imports are uncompetitive, or don't exist. This suggests our manufacturers either lack the plant or capacity to ramp up production, as they have done in previous export-led recoveries going back to 1985. But it's not that odd, as much of the manufacturing base has been wiped out – It's just 13 per cent today compared with 20 per cent in the 1980s.
Without doubt, the biggest task for the coalition – and industry leaders – is to encourage companies to invest. All eyes will be on the GDP figures coming out this week. The OBR estimates a 0.8 per cent rise. If its right, then this will be the sort of kick-start needed to get industrialists to spend their £50bn cash surplus. And, if they are bad, say lower than 0.5 per cent?
Then T S Eliot may have been right all along and April was indeed the cruellest month.
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