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This edition of the Money Programme was originally broadcast on BBC Two 13 June 2008.
Max Flint (Presenter)
Tonight on the Money Programme, gold, and lots of it. With the credit crunch biting, should we be putting our money into this?
We meet the miner who’s made a fortune from it.
Pierre Lassonde
With one drill hole you can create a billion dollars worth of wealth.
Max (commentary)
We take you from the gold mines of Nevada to the jewellers of Dubai.
Tawhid Abdullah
Gold, in general, it's beautiful; it's a unique metal, that's why people do buy it.
Max (commentary)
And the king of bling, Bobby George, speaks about his solid gold love affair.
Bobby George
You know it's the sort of thing that you wear for show and it's an image and it looks good it's sparkles, you know?
Max (commentary)
And we reveal the potential cost of Gordon Brown’s decision to sell off over half the UK’s gold reserve. With uncertainty in the money markets and turmoil at the banks, could we all do with a dose of gold fever?
The value of gold has been going through the roof. Its price has quadrupled since 1999, and in March it reached a $1,000 an ounce for the first time in history.
I’m on my way to meet top bullion dealer Tony Baird. He’s been working the gold market for over 40 years.
Max
How much is that worth?
Tony Baird
That, ah, something under £200,000.
Max
£200,000?
Tony Baird
Yes.
Max
£2 – 4 – 600,000
Tony Baird
Yes
Max (commentary)
£200,000 for a lump of metal. No wonder it’s so mesmerising.
Max
Is it normal to get hypnotised by that?
Tony Baird
Ah, I'm not but I can see, I can see that you're enjoying it.
Max
I just cannot take my eyes off it, it's tremendous, such a tactile piece of investment.
Tony Baird
Well, if you want to try picking it up with one hand, you can have it. But…
Max
What? That gold bar?
Tony Baird
Yes, but you have to pick it up by the sides and with one hand, if you can do that it's yours.
Max
Just one hand by the sides?
Tony Baird
One hand, by the sides, it's a piece of cake.
Max
Can I?
Tony Baird
Yes.
Max
I actually could leave work at this moment.
Tony Baird
Sorry, you've failed.
Max
I can't even shift it, how frustrating.
Tony Baird
And I get to keep it
Max (commentary)
Shame I didn’t walk away with a bar. Even a small investment just a few years ago would have made significant returns. But can it continue?
Max
This is what private investors are after isn’t it, a 100 gram bar.
Tony Baird
That is the most popular size of all, yes, it’s a worthwhile investment at a low premium when you get to that size.
Max
And this is worth how much?
Tony Baird
Yeah, that’s about £1,550 at the moment.
Max
So two, three, five years ago this was what half the value?
Tony Baird
Five years ago, less than half, about £600.
Max (commentary)
There are several reasons why gold has become more attractive to investors.
Jill Leyland
First of all the supply of gold has been constrained, um the mine has not risen, if anything it's slightly declined. Secondly jewellery demand has been extremely robust and, and very strong.
More recently, of course, in particular since the financial crisis erupted last August. There’s been a flood of investment into gold since then, really because of its safe haven properties.
Max (commentary)
Gold has always been highly valued. Throughout its history kings have been buried alongside it, wars fought over it, myths told about it and countless songs sung about it.
Thousands of years before gold was valued as a commodity it was revered for its beauty. So often gold ornaments tell us much more about the past.
Tim Green
I think in many ways gold is a window on its world. In the ancient world particularly in Egypt gold was for example in the treasures of Tutankhamen's tomb and not only was it there as an ornament but it gives us a curious historical record because on Tutankhamen's throne there were gold panels which show him hunting with his wife in the Nile, so in any age gold can be a window on the world, on that world, that age.
Max (commentary)
More recently, the California gold rush of 1848 enticed thousands to America’s west coast in search of their fortune. 90 per cent of all the gold in the world has been mined since the gold rush.
Gold is indestructible; every single ounce of it ever mined still exists today. 161,000 tonnes to be precise, which if you melted it down would fit into two clock towers, not this one, that one
About three quarters of all gold is made into jewellery, most of which appears to have been bought by one man.
Archive footage (Bobby George)
“He’s been called the Liberace of darts, a true showman, Bobby George likes to make an entrance.”
“Girls doing the Halstead conga, mother-in-laws happy as Larry.”
Bobby George
Hello Max, and welcome to George Hall.
Max
Thank you. So when did you first get some gold then? Was it investment? Or was it just something you wanted?
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Content last updated: 23/06/2008
