There’s no question that the crisis produced a surge in demand for gold, as individual investors sought out the yellow stuff as some kind of “hedge” against something bad happening in the future. It didn’t produce amazing gains for the metal’s ardent fans (though they’ll always come up with an excuse for that)
The UK’s Royal Mint had to work double time to keep up
Output climbed to 16,910 ounces from 8,030 ounces a year earlier, according to data obtained by Bloomberg News under a Freedom of Information Act request. First-half production jumped 86pc to 45,406 ounces, the figures show.
Demand for physical gold as a store of value and hedge against inflation has increased as governments spend trillions of dollars to combat the worst recession since World War II. Bullion holdings in gold-backed exchange-traded products rose to records in the second quarter. Gold is trading about 7pc lower than the record $1,032.70 an ounce reached in March 2008.
Alas, with the crisis fading, fewer and fewer people are looking to gold as something to keep under the pillow:
The mint’s gold production in the second quarter, when the benchmark FTSE 100 Index of shares gained 8.2pc, fell 41pc from the prior three months. The index slid 11pc in the first quarter, its seventh straight retreat, helping to stoke demand for bullion as an alternative investment.
Observation: It seems like there are fewer and fewer gold ads on TV right now. Who wants to buy gold coins straight from some heavily-guarded vault, when the Dow is going up on a daily basis. Conversely, who needs to trade in their Cash 4 Gold, if their investment portfolio is liquid and healthy again?
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