The Case For Gold Enters The Telegraph

Ian Cowie explains why gold may be a good investment for U.K. residents on the eve of the election. Inflation is heating up, and interest rates aren't rising enough to compensate. More to the political point, election season seems to be good for gold in sterling terms.

Uncertainty created by general elections appears to boost the sterling price of gold. During the year after the last election in May, 2005, the bullion price increased by 62pc.

That was its biggest ballot year rise since Margaret Thatcher's first election victory in May, 1979, when the gold price soared by 89pc.

While the price fell by 10pc and 12pc respectively during the election years of 1987 and 1997, bullion's average one-year gain over all national ballots since 1970 has been 18pc.

While history is not a guide to the future, those who fear a hung Parliament may draw some comfort from the fact that gold even staged a modest increase of 6pc after the last indecisive election in February, 1974.

Governments in a tight spot can print money or let inflation devalue the currency to float them off the rocks of excessive debt. But they cannot make more gold or debase this precious metal.

The rest of the article contains a brief overview of the options to buy gold as well as the inflation case for buying it. The way it reads, it seems targeted to those who haven't considered gold.


As a reinforcer of a sort, I point to the fact that the most-read article in the Telegraph's personal-finance section is entitled "Britain's savers face 'worst time' to save." I'll let its intro speak for it:

Financial experts warned it is now the “worst time” to save following a drop in savings rates during the last six months and a rise in inflation to 3.4 per cent.

It means savers are out of pocket by more than £200 in a year on a £10,000 savings deposit once inflation and tax is taken into account....