My latest for Moneyweek:
After moving above $1,260 an ounce on Friday afternoon, gold closed the week at $1,256. It’s a new record.
And it’s no surprise.
Governments and central banks have between them created an environment of negative real rates. For example, retail price index inflation in the UK is above 5%. Yet the Bank of England has kept the bank rate at 0.5%. By the time they’ve paid tax, savers need to find a bank that pays more than 7%, just to keep up.
The result is that savers are being mugged by policy-makers. Money in the bank is losing its purchasing power, as the people in charge attempt to devalue the currency. Watching your savings shrink by the day isn’t much fun. So people are being driven to find a more effective store of value.
Is it any wonder people are flocking to gold? Read on …