Investing in Gold

Gold is often regarded as a safe haven in times of turmoil and uncertainty. In recent times, gold has exceeded $1,000 per ounce (February 2009).

In 2008, South African gold production slumped by almost 14% (to 220 tonnes) a fraction of the 1,000 tonnes produced in 1970 when Africa was the world leader. In the same year, world production of gold was 2,385 tonnes.

Private Investors can participate in the fortunes of gold by using Exchange Traded Commodities (ETCs). has over 120 ETCs listed on 5 European Exchanges and Exchange Traded and several of them relate to gold.

Gold bars and tradable gold coins such as Krugerrands and Sovereigns can also be bought and sold through dealers. The most liquid bars to trade are Good Delivery bars, sold off by central banks - although in 2008 the central banks seemed to be reluctant to sell their gold reserves. Gold can be put into a self-invested personal pension (SIPP). The Internet has opened up the market for smaller amounts of gold to be traded easily, with groups such as acting as market makers.

Storage of physical gold with banks in the US and Switzerland can also be arranged for investors with millions of pounds in assets. A typical management fee of 1% per annum will be levied for the storage of £10,000 or more of gold in a Swiss account.

Lastly, investors could consider a gold investment scheme offered only by the to purchase aaa-rated gold certificates, which can also be put in a SIPP. There are no ongoing costs for storing the gold - instead, $50 is paid per certificate and there is a one-time charge of 2% above the spot price. But an initial investment of $10,000 is required.