View more on these topics

Going for gold

Despite the recent fall, gold prices should continue to rise and some forecasters believe the price may reach $2,000 an ounce in the medium term. It would need to rise to this figure to reach an all-time high in real terms after taking into account inflation since 1980.

In the shorter term, it may well rise from around the present price of around $850 to over $1,000 per ounce this year.

Production of the world’s goldmines continues to decline and it would take a significant further rise in the price to reverse this trend and make it worthwhile for marginal mines to restart production because there has been a significant rise in production costs.

Consumer demand from China and India is increasing rapidly as the middle classes in those countries continue to prosper.

The fund I like best for most investors is the Merrill Lynch gold & general fund, which has around 75 per cent of its investments in gold shares, around 12 per cent in platinum, 7 per cent in silver and the balance in gold bullion, diamonds and a small amount in cash.

The geographical spread is very wide, with around 28 per cent in North America, 17 per cent each in South Africa and Australasia, 14 per cent in Europe and around 10 per cent in Latin America and the balance mainly in China and Russia.

Gold shares are far more attractive than investments in the metal itself as profits from many mines increase far more rapidly than the rise in the gold price.

Graham Birch, who runs the fund, has shown out-standing past performance. This fund has risen by over 230 per cent over five years to December 1, 2007 as well as more than doubling in value over three years.

Those who want to diversify into other commodities as well as gold should consider the JPM natural resources fund which also has an excellent record.


Commercial conditions

The times are certainly changing for retail investors in property funds. There is so much news around covering commercial property fund redemptions by retail investors such as Aegon stopping customers from withdrawing their money from the £2bn Scottish Equitable property fund run by Morley Fund Management.

The challenge for Trevor Matthews

I am going to make a few bold and probably foolhardy predictions. The first is that Trevor Matthews departure from Standard will make next to no difference in the medium and long term to the life office. The second is that he will have a massive impact on Friends Provident provided he gets there in […]

Standard Life announces extra £800m of with-profits bonuses

Standard Life has announced that an estimated £800m of bonuses will be added to its with-profits plans in 2008.Its with-profits bonus declaration states that bonus growth rates for unitised with-profits bonds will increase from 2 to 2.5 per cent per annum and from 1.5 to 2.0 per cent for other life plans.Standard Life says where […]

Caroline Flint appointed housing minister

Caroline Flint has been appointed housing minister at the Department for Communities and Local Government.Flint was previously minister for employment and welfare reform and minister for public health before that.She says: “Housing is a key priority for this Government. We desperately need more affordable housing to help first-time buyers and young families who are struggling […]


Guide: reporting to the Pensions Regulator — what and when?

Johnson Fleming has published a step-by-step guide demonstrating the importance of record keeping and reporting, and how it can ensure you operate a successful scheme. The guide takes you through some key questions you need to ask and identifies the information you need to obtain. The topics include: why you need to keep records and the benefits of doing this; registering your scheme; what information you need to record to ensure you meet the Pensions Regulator’s requirements; and what items need to be recorded and when.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm