The gold price appears to be creeping up somewhat, first overnight and into today. Despite Stacy Herbert’s claims that this was due to mine and Max’s conversation about gold (watch it here) it is far more realistic (!) that it is down to safe-haven buying as tensions escalate once again.
The climb back towards $1,300/oz may come as a relief to those in gold investment as the price of gold touched $1,268/oz yesterday, a two-and-a-half month low.
London Gold Fix
The London Gold Fix has very much been ‘the’ story in the gold market this year. Even when I attended a breakfast with Jim Rickards, all the top City financiers there were asking what it meant.
Bloomberg was the first (as I understand) news service to report on the investigations being carried out by some regulators into the London Gold Fix. So, it was no surprise to see them reporting on this once again, earlier today, having spoken to ‘people with knowledge of the matter.’ According to their sources, the UK financial regulator, the FCA, is ‘observing’ the London Gold Fix.
Societe Generale reportedly received a visit from the regulators at their London office, as part of the ‘observation’ being carried out. Soc Gen are one of the five members of the London Gold Fix.
Bloomberg reports, ‘“The FCA is clearly trying to educate itself on the mechanics of benchmark-setting in the gold market,” said Simon Hart, a London-based lawyer. “It demonstrates that the FCA is looking into the suggestion that there has been benchmark rate manipulation, although that is very different from a formal investigation.”
Russia reduces gold reserves
Central banks gold purchases and sales were reported by the IMF earlier. In the last decade, the central bank of Russia has been the biggest buyer of gold reserves. However, last month they decided to sell 1.2 tonnes. This won’t spark headlines given they add previously added 7 tonnes to holdings in March.
Is gold in your pension?
The FCA is reportedly looking into adding gold bullion to the list of ‘standard assets’, Bloomberg reported earlier today. Gold has been permitted to be part of Self-Invested Pensions Pension (SIPPs) since 2006. However, if the asset is added to the regulators’ list then it will go a long way to bringing gold as an investment option in pensions, to peoples’ attention.
Fellow gold investment commentator Mark O’Byrne, told Bloomberg that the percentage of those who have decided to allocate their investment funds to gold has dropped from 20% in the 1980 to ‘less than 2 or 3 percent’ today. It’s Friday and so we thought we would bring you a light-hearted read about a good, old-fashioned, treasure story.
Be sure to check out our fun Best of the Web read today, it’s a great tale about a modern day hunt for treasure, and quite a lot of gold treasure.