Jonathan Browning and Thomas Biesheuvel
Thursday, Oct 9, 2008
Londoners stood in line outside the largest gold coin and bar retailer in the city’s West End shopping district, clogging the lobby and trading among themselves as they sought a safe haven for their money.
“People want something tangible, something they can hold on to, something the banks can’t give them,” said Chris Burrow, the owner of ATS Bullion, the gold dealer in the Strand that traces its roots back to the 17th century. “There’s no time to breathe. We’re rushed off our feet. Staff are exhausted.”
As U.K. stocks tumbled to a five-year low, paced by financial-services companies, gold advanced. Since Lehman Brothers Holdings Inc.’s Sept. 15 filing for bankruptcy protection, exacerbating the worldwide credit crisis, gold for immediate delivery has jumped 19 percent.
“Investors are rushing to safe havens and physical gold seems to be the favorite one,” said Frederic Panizzutti, a senior vice president at MKS Finance, one of Switzerland’s four bullion refiners.
British government action to prop up the banking industry has failed to reassure investors. The U.K. on Oct. 8 promised 50 billion pounds ($86 billion) of capital to banks, the same day the Bank of England cut its benchmark interest rate by half a percentage point. Last month, the government brokered a takeover of HBOS Plc, Britain’s largest mortgage lender, and seized control of Bradford & Bingley’s mortgage division.