Published On: Fri, Jun 21st, 2019

Gold prices: Gordon Brown’s disastrous deal exposed – Worth £12BILLION more today | UK | News

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Gold prices soared to their highest level in more than five years yesterday, after the United States Federal Reserve signalled interest rate cuts were possible towards the end of 2019. The price of spot gold climbed during early trading hours and was at $1,380.40 (£ 1,232.34) per ounce at 10am on Thursday, according to live data on Bullion By Post. The surge is seen as a sign that the metal is recovering its status as a safe haven.

With investors moving into gold as a safe protection against weaknesses in global equity markets and uncertainty about the future of trade relations between the US and China, looks at what was arguably the least well-timed investment decisions of any age.

Twenty years ago, then Chancellor of the Exchequer Gordon Brown announced he would be selling tonnes of Britain’s gold reserves.

Between 1999 and 2002, Mr Brown auctioned the sale of 401 tonnes of gold in 17 auctions.

Figures released by the Treasury show that the total proceeds from the sales was around $3.5billion (£2.7bn).

Director of Gold Investments Limited, Simon Temple, told that if Mr Brown had sold the gold at today’s price, it would be worth around $18billion (£14.2bn).

The difference – $14.5billion – would be worth £11.4billion if the proceeds were converted into pounds.

Mr Temple said: “The Gordon Brown saga is always talked about in the gold market.

“If he had sold the 401 tonnes of gold at today’s price, it would be worth around $18billion.

“One of the main reasons the price he got was so low, was that he announced to the market he was selling our gold over that period, which caused a 10 percent drop in the gold price to a 20-year low.

“Imagine what that could have done for the economy in these torrid times.”

He added: “Gold has considerably outperformed the FTSE 100 since 1999.

“For example, if you had invested $1000 (£789) in a FTSE 100 company in 1999 on average it would now be worth $1361 (£1074). However, if you had invested the same amount in gold in gold it would now be worth $5131 (£4050).

“This huge mistake benefited every other country in the world investing in gold but severely in the long term hampered our economy.”

Adrian Ash, director of research at investment firm BullionVault also told the BBC in May, there were plenty of people warning Mr Brown against the move at the time – including the Bank of England.

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