Capital Gold Group Report: World Gold Council sees interest rate cuts benefiting gold investment

Marcus Grubb, Head of Investment for the World Gold Council, an organisation formed and funded by the world’s leading gold mining companies, has commented on the recent interest rate cut by the Bank of England:

“[The] cut in interest rates by the Bank of England to 0.5% and its decision to increase money supply in the banking system by £75 billion, will remind investors of the spectre of future inflation and its eroding effect on wealth. With interest rates now at the lowest level in 300 years, investors are searching to find instruments with which they can protect their portfolio from inflation’s pernicious effects. Gold tends to rise in value when paper money loses its worth, so for retail and institutional investors alike, gold’s ability to preserve wealth will become even more attractive.”

Grubb, on gold and inflation:

• “The value and purchasing power of paper currencies have declined over the years relative to gold, as most governments have decoupled their currencies from any real assets and many have suffered from high bouts of inflation

• “Gold is nobody’s liability - its value does not depend on someone’s ability to pay and it cannot be debased

• “Contrast gold with cash, bonds and equities whose value hangs on their issuers’ future ability to honour their obligations - and which can, in certain circumstances, become worthless.”

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