Well it looks like cynicism is now well and truly permeating through the "cash in your gold" business, which sprung up fast on the heels of the global financial meltdown in 2008. Complaints and reports of predatory practices are rife and it certainly didn't take long for the shine to fade. So its no surprise that in January, the OFT announced that it would be carrying out an investigation into the business. Whilst we await the outcome with interest, the outcome is unlikely to surprise anyone.
Of course gold has always performed well as a safety net and a store of value when all around us is falling apart. But since 2008, the gold spot price has remained robust and is now near record high; so to make a margin in this business you need to buy cheaply. And the cash in your gold merchants have been accused of praying on public desperation and taking advantage of their lack of knowledge of the true value of their gold possessions.
But as the economy slowly returns to some degree of normalcy, it looks like the publics need to sell their gold to raise quick cash also be on the wane. If so, then we may soon start to hear more of about public purchases for savings and investment purposes - which is a growing trend, but not one, it would seem, in which the media are particularly interested.
Here is an clip from a recent miningmaven interview with Andrew Bell, chairman of Red Rock Resources who are exploring for gold in Kenya. Worth listening to what he has to say about where the price of gold is heading.
Cartoon in the header is courtesy of: http://www.dotgif-comic.com/
