I was a bit surprised to hear that the rich are buying gold because the metal has stayed away from the highs it briefly reached in 2011 and 2012.
Nevertheless, it is true: the wealthy have been gun buying up gold bars. As the Telegraph reports, “Super-rich rush to buy ‘Italian Job’ style gold bars.”
The super-rich are looking to protect their wealth through buying record numbers of “Italian job” style gold bars, according to bullion experts.
The number of 12.5kg gold bars being bought by wealthy customers has increased 243pc so far this year, when compared to the same period last year, said Rob Halliday-Stein founder of BullionByPost.
“These gold bars are usually stored in the vaults of central banks and are the same ones you see in the film ‘The Italian Job’,” added David Cousins, bullion executive from London based ATS Bullion.
The bars which are made from pure gold and are worth more than £300,000 each at today’s prices of $1,223 (£760) an ounce.
That was two days ago. I haven’t looked to see if perhaps the Scottish gold collectors have dumped some of their bullion now that Scotland failed to gain independence. (I really don’t know if that would be enough to affect the price of gold anyway.)
But what does this news mean for what people are expecting in this economy? By invoking the name of a Hollywood Movie, the story almost seems cute. But it seems to me the news deserves to be taken seriously.
The sales of 1kg gold bars, worth about £25,000 each, has doubled during the three months ended August, when compared to the same period last year, according to ATS Bullion sales figures.
Sales of the more popular gold coins such as the quarter ounce sovereign and one ounce Krugerrand have also doubled this year, according to figures from BullionByPost.
Mr Halliday-Stein said that while most customers arrange for secure storage of the larger bars in secret vaults operated by Brinks, some customers have taken physical delivery of the 12.5kg bars. The small coins can also be sent in the post.
Bob Allen comments on this story:
Silly rich people! Why would they do this, when they could just pile up paper money, that governments print with reckless abandon? I mean, this stuff just sits there in a vault… earning no interest… kind of like paper money in a bank these days.
Rich people sure didn’t get there by being smart, did they?
Or… did they?
In other words: What do they know?
The investment and financial security decisions of the super-wealthy are not necessarily the most rational decisions for people who are not that wealthy, or who are not wealthy at all. But it does show you that people are worrying that the modern world financial system could go through a hard time.
Others have predicted that the economy is about to go downward. This is just one more piece of evidence.
Of course, knowing the economy is unsustainable is not the same thing as being able to predict the collapse.