The most malleable of all metals, one of earth's least reactive chemical elements and used in monetary systems across history, gold means many things to many people.
At Rothschild & Co our history and affinity with gold as a store of wealth has come from an intimate knowledge of the metal gained over two centuries. Building on layers of learning, it is only natural that gold forms part of our investment strategy. In today's investment views we find out how we gained a long-term perspective on gold, what is our view of gold as an asset class and why we believe choosing the right gold fund matters to our clients today.
Cover image: Stamp of authenticity on a gold bar produced at the Royal Mint Refinery, operated by N M Rothschild & Sons, London
In the following article, we interviewed the Director of The Rothschild Archive, Melanie Aspey, our Global Investment Strategist, Kevin Gardiner and Head of Investment Solutions, Joerg Kopp to bring you our perspective on gold.
Interviewed by:
William Haggard
Head of Investment Insights
Melanie Aspey Director of The Rothschild Archive
Melanie, you've described the story of Rothschild and gold as a continuum spanning over two centuries, why so?
Gold bars of various weights
Thank you William, the Rothschilds' understanding of gold stretches across borders, cultures and time.
At its most intimate, it involves protecting gold for private individuals such as the Elector of Hesse, whose lands were invaded by Napoleon in 1806. At its most seismic, it involves supplying the British Government with gold during the Duke of Wellington's 1814 campaigns, averting the collapse of the Bank of England in 1825 or running the lease on the Royal Mint Refinery for over a hundred years. At its most strategic for the world of finance, it involved establishing the globally recognised price for gold amongst market participants every day at the firm's New Court London offices from 1919 to 2004.
Finally, at its most symbolic, it involved the financing of the salvage operation for HMS Edinburgh found 200 miles from Murmansk in the depths of the Barents Sea. The cargo of £5 million in gold bullion, weighing 40 tons was lost when HMS Edinburgh was torpedoed on 30th April 1942. In 1981 attempts were made to salvage the gold, which was then worth £45 million. The operation was partially paid for by the first gold bar salvaged from the ship which contained the Rothschild hallmark. Such is the quality conveyed by this hallmark, that the bar was sold at a premium and has come to be known as the Edinburgh bar which is now one of the treasures in The Rothschild Archive (Figure 1).
I use these examples to illustrate the Rothschilds’ rich and varied history with gold over the last two centuries. You can review some of these key dates in the timeline below.