Monday, 19th February 2007 (4971 views)

Chancellor of the exchequer Gordon Brown's decision to sell off over half of the UK's gold reserves between 1999 and 2002 has come under fire due to the exponential increase in gold's value of late.

The Treasury might have missed out on a windfall of £2.6 billion due to Mr Brown's ill-timed sale of the reserves which raised £1.8 billion at auction.

Some 395 tonnes of the country's 715 tonnes of gold were sold but critics claim he could have made £4.4 billion from the sale at today's gold prices.

Rival political party treasury spokespeople from the Conservative and Liberal Democrat parties have issued accusations of Mr Brown making a catastrophic mistake.

However the Treasury defends its sale.

It said: "Gains and losses should be measured over the longer term, taking into account all elements of the restructuring programme, including risk."

Gold has long been seen as a safe haven investment by those worried by plunging share prices or crashes in other industries.

Its price has kept pace with inflation for around 200 years so an investment that retains its value even in times of economic uncertainty is comforting to investors.

 

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