Buy gold in Harrods as precious metals go retail
Posted on 15 October 2009 with no comments from readers
If you wanted a more potent symbol of the rise of gold among retail investors then the news that London department store Harrods is to sell gold coins and bullion over the counter from today is surely just that.
Apparently Harrods is the only place in London where you can pick up a 12.5kg bullion bar off the shelf. One could imagine bumping into Jim Sinclair with his trolley loaded or some of the guys from The Daily Reckoning popping in for a bullion bar after lunch.
Retail gold
Harrods is better known for its smoked salmon and food hall and has never sold gold bullion in its entire history. But in retailing you always need to spot a trend.
Chris Hall, head of Harrods Gold Bullion, told The Daily Telegraph today: ‘The financial environment has kindled a new demand for physical gold among private investors in Britain. For many people this is a new and unfamiliar asset class that demands absolute trust. Until now London has had no well-recognised name serving this market.’
Harrods owner Mohamed Fayed, who made his first $50 million in Dubai as a controversial middle-man, has teamed up with Produits Artistiques Métaux Précieux, the Swiss refiner, to sell gold from the store.
Golden bubble?
Does this mark a market top for the yellow metal? Well they are not exactly queuing down the streets to buy the stuff yet. Perhaps we will need to wait for the Harrods sale.
Indeed, the price graph for gold is an upward slope and shows no sign of a blow-off just yet. There is nothing like the tell-tale price spike seen in oil in the summer of 2009.
So buying gold in Harrods might yet prove a good buy, although caveat emptor mark ups have always been on the high side at Harrods. You can buy gold far more economically elsewhere.
no Comments posted by readers:
I could understand if people were buying small coins, but the best source I’ve come across for bullion bars
is Bullion Vault. Very reasonable prices there!
But as to whether this is bullish or bearish for gold…
I was just reading an article over at Kitco (by Jon Nadler, I think). Apparently, retail jewelers in India are selling “at discount”, in that the usual mark-up for jewelry is reduced, selling for close to the spot price for content. In the past, I have also read that premiums do not do so well when prices are high.
However, I wonder if these assessments are what they appear to be. It could be that the premium cost disappears in a price rise, the gold having been bought when the price was much lower. So they wind up profiting, really.
I don’t know the details with Harrods, so I can’t say. But if they are in fact doing it that way, then I think this move is definitely bullish for gold, as they would be gearing up for a big price rise.
I’m curious to know what type of gold products Harrods will be selling. If they’re teaming up with PAMP, does this mean they will be offering customized coins and bars created by PAMP especially for Harrods?
Here’s a blurb on PAMP I found on another site:
“PAMP (Produits Artistiques de Métaux Précieux) is one of the world’s leading private gold refining and manufacturing company. This Swiss company, affiliated with MKS Finance, was founded in Chiasso in 1977 and produces in excess of 12 million ounces of gold annually, valued at around $4 billion US dollars. It is well known primarily as a major producer of gold monetary bars, which are recognized as “Good Delivery” by all the world’s leading gold exchanges. PAMP also produces a broad choice of specialized products in solid gold. These include coins, medals, jewelry and an exclusive collection of solid gold watches, produced in PAMP’s own manufacturing facilities. The company web address is http://www.pamp.com.”