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Jim Boulden: Another deal done, another customer selling gold coins to London dealer Mike Temple. It's no surprise people are selling their gold coins and bars with prices at 25-year highs. But why are there still plenty of people buying at this level?
Mike Temple: Because they see it as a long term investment, and as a security backing, you know, to their total portfolio, just to keep a little bit, say, 10% or whatever they want to keep, in physical gold.
Jim Boulden: Gold has always had an appeal of course. And demand in Asia for personal use is very strong. But the price has spiked in recent months thanks to speculators, and also buying from conservative institutions like pension funds , making these little bars worth ever more their weight in gold. (be worth its/your weight in gold: to be extremely useful or valuable)
Jim Boulden: This is almost 20, 000 dollars here [Yeah! ]as an investment, and the value of this would have gone up how much in the last year?
Mike Temple: Well, nearly, say between 30 and 50 percent.
Jim Boulden: People are now talking about a bubble in gold prices. But speculators are gambling that demand will continue and gold will continue to be in short supply.
Jill Leyland: There has been a dearth of exploration at the end of 1990s and the beginning of this decade. There are, there have been relatively few major finds of golds to replace exhausted mines. In contrast, demand last year was extremely strong. Identifiable demand rose by 7% in tonnage terms and by 16% in dollar terms.
Jim Boulden: But of course it's not just gold that glitters these days. Oil is backed up at record levels, silver is at a 22-year high, even orange juice futures are at a 14-year high. And copper prices have doubled in the past year.
Peter Kettle: It's a combination of the supply-demand position in the individual markets and a number of general factors, the, the growth in demand from China was a big one. But I think also, yes, the, the increasing interest of, of pension funds in diversifying their assets, putting a very small proportion of the total into commodities. But that small proportion is very big money.
Jim Boulden: A risk perhaps with prices so high. But for now, Mike Temple is happy to lug bags of silver and gold to and from his vaults each day, as sellers and even more buyers are pouring through his door.
Jim Boulden: Jim Boulden, CNN, London.
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