The rush for Gold: Sales of bars double

Investors opt for bullion rather than shares or property. By Rachel Shields
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The Independent Online

Britons who still have any wealth to invest are turning their backs on the property portfolios, stocks and shares, and sports cars that have long constituted conventional investments, and pumping their savings into old-fashioned gold bullion and coins.

Leading gold bullion suppliers BullionVault, ATS Bullion and Baird & Co have all revealed record levels of investment in gold bars, and the World Gold Council (WGC) has reported a big increase in the number of gold coins being bought.

Last year saw an 81 per cent increase in UK investment in gold coins, taking the amount bought to 4.5 tons. Traditionally, in Indian and Asian markets, gold jewellery and coins have often been traded, while in France and Italy the trade in ingots – small pieces of gold – has previously been much stronger than in the UK.

But this is changing. "We have seen a rising level of interest in gold as an investment in the UK," said Matthew Graydon of the WGC. "Retail investors have realised that gold offers an effective hedge against currency movements, is an effective inflation hedge, and is a proven safe haven in times of financial turbulence."

New figures from BullionVault reveal the amount of gold bars purchased through them has doubled in the past year to 7.5 tons, more than half of which is owned by British clients. ATS Bullion claims its turnover has doubled in the past year, while Baird & Co reports customers queueing around the block to buy its gold.

With minimum outlays of around £1,000 at most bullion companies, tangible investments are looking increasingly attractive for middle-income savers. It seems that factors which once deterred people from investing in gold – such as bullion not paying interest – are no longer putting savers off.

"I put a significant percentage of my investments in gold bullion about two years ago," said David Walker, an account manager for a media company.

"Some people thought it was an odd thing to invest in, but there is a great sense of actually owning something... If you put your money in pension funds, it could lose money, if you give it to a fund manager, they might lose it, but having it in gold makes you sleep a lot better at night."

Buying shares in gold-mining companies is also on the rise, with firms such as BlackRock Gold and General Investment Managent reporting an increase in clients keen to invest in gold funds.