I’m sitting in a café near Leadenhall market. I’ve come to meet City worker, Matthew Taylor (45), who has worked in the square mile since leaving University.
The married father of one invests in physical gold and I want to find out why. Our conversation starts with the recent snap Election results. I ask him if he was surprised that we now have another hung parliament.
"I felt that people were becoming fed up with austerity so it wasn’t a total shock although I thought it was still going to be an overall Tory majority. Where I live in Sussex there seems to be more services being cut. For instance, there’s a community centre near me that’s closing. I also hear about public sector workers being fed up with their pay".
We continue chatting and Matthew says that he is concerned about the state of the economy in this country. I say that Mark Carney has hinted that the Bank of England may put interest rates up later on in the year – a sign that’s there’s possibly more confidence about in the economy.
I also say that the US Fed is also continuing with increasing interest rates there. Generally gold does not do so well when interest rates are higher because investors feel there are better returns to be had elsewhere although this is not always the case.
"Well the way I look at gold is like an insurance policy. I hear what you are saying about interest rates. The fact is that there are still many unknowns and perhaps the biggest impact may come from Brexit. There’s also North Korea – don’t forget that Seoul [a key financial centre] is only a few miles from the border of North Korea.
"I also read also that 90% of new cars are bought on hire purchase. What happens if there’s another economic crash with people not being able to default on car loans? An article I read today said that some dealers were selling cars to those who are unemployed or or on low wages – what if they default on their payments? It would be like the subprime mortgage crises all over again."
So why gold?
"I like the idea of having something physical – you’re not relying on digital currencies or the banks.”
"Surely, as we have seen, gold prices are very volatile," I suggest. Matthew nods.
"Yes I agree that gold can be risky if looking you’re looking at it for the short-term. That’s why I do view it like a kind of insurance policy, for the medium to long-term. And if you go back over the data, historically gold has always performed well."
Matthew has only recently invested in gold but is confident about his decision.
"Gold is only a small part of my portfolio – I think it’s important to spread the risk as much as you can. I also invest in stocks and shares. It’s all about having a balance".
How did he know where to start with investing in gold?
"It was actually through recommendation that I came across Gold Investments. I had walked past their offices for a number of years. I did some research, liked their website and what they offered. I also enjoyed the invaluable advice on their blog.
"When I met them, I found them extremely knowledgeable and approachable. It’s an established family-run business – they are one of the oldest and respected bullion dealers in the UK. They seem to care about their customers. It was easy to buy the gold which I store at their vaults at the London Silver Vaults. Gold Investments also holds gold for wealth funds, self investment pension portfolios (Sipps), investments, banks and other institutions."
Matthew also found the bullion house offered some of the cheapest gold on the market. He liked the fact you could drop in for a chat because of their offices being close to where he works in the City.
The hour has gone quickly and we’ve yet to talk about his investments in gold as part of his Sipp.
As Matthew leaves he shows me a picture of a tea shop near Devon. My plan eventually is to run some kind of eatery – less stress I hope. If I did do something different there would be the financial backings in place which includes gold.
You can view Gold Investments’ wide collection of gold here. They are also currently offering free delivery on orders worth over £1000.
Journalist John Mitchell has been writing professionally since 1994 and specialises in the financial markets.
Article for case illustration purposes.