Bobby George

No it wasn't investment, if you buy gold as bullion and you could and you bought it as an investment but as an article it's to wear and get enjoyment out of wearing it.

‘Cos everyone it doesn't matter what country you go in the world if you've got gold and people say oh he's got a lot of gold, I mean if I'm skint then I go abroad I can say well look can I stay the night here's me bracelet they take it straightaway because they know the values the same.

Max

Yeah well with one of those bracelets you could buy the hotel I imagine.

Bobby George

Well, no, I'll have a, I will stay for a week at least you know.

Max

Mini bar, everything.

Bobby George

Okay, let’s see how good you are Max.

Max

That's a 12.

Bobby George

That's a 12. That's a 12 – that's alright.

Max

Do you want me to tell you what I'm aiming for, so you?

Bobby George

No, I think you just say, look at the middle.

Max

Go on, you have a go, cause I don’t want to hog the dart board.

Bobby George

Well I got a180 last time, probably won’t get it this time.

Bobby George

Oh that's a treble 20, that.

Max

Okay.

Bobby George

And that's not cheating, that's another triple 20.

Max

That is, yeah.

Bobby George

And that's not cheating, now this is the dodgy bit and another 20 here are.

Max

Yeah.

Bobby George

So is that good or what?

Max

That's very good, yeah.

Bobby George

See, I used to be big-headed once but I'm perfect now.

Max (commentary)

And what does every gold wearing darts professional need?

Bobby George

These are 22-carat gold darts,

Max

Wow!

Bobby George

These are flights canes.

Max

Now you can't play with these can you?

Bobby George

You could throw them. You'd never play with them ‘cos they're, they're not balanced right, and not only that because they're 22-carat they're soft .

Max

Okay.

Bobby George

They'd bend the points would bend the flights would bend but I just had a, I had them made in the Middle East something that my darts 22-carat gold just for show basically.

Max (commentary)

But this amount of jewellery is nothing compared to what’s on offer in another part of the world, time to go to the Middle East. Dubai is one of the busiest gold markets in the world. Last year the country traded over $14bn worth.

Dubai has the highest concentration of jewellery shops in the world. This shop here is just one of the many hundreds stocking gold jewellery, although even Bobby George may think twice about buying some of this stuff.

Despite the recent price rises, business is booming.

Tawhid Abdullah

Look at this small store, does a huge turnover of kilos every day, where in certain part of the world this turnover of one week could be not even achieved in a year's time.

Max (commentary)

The Middle East, India and South East Asia are the world’s most vibrant gold markets, and now account for almost 65per cent of all traded gold.

Max

How important is gold culturally, to be seen to be wearing gold and also giving gold?

Tawhid Abdullah

It is important, it's part of the culture; taking care of the parents, visiting families, travelling in summertime and buying jewellery is in and it's a feeling of lifestyle also.

Max

And what's so special about gold, the metal, why are people so keen to get gold when they could have platinum or silver?

Tawhid Abdullah

Gold in general, it's beautiful. It's a unique metal, that's why people do buy it. It's proven to be one of the best things that you ever buy. You know it lasts for years, if not generations and generations

Max (commentary)

Dubai may be a leading gold jewellery market, but much of it is still being excavated from vast open pit mines. America is where this story takes us next. Last year, almost 240 tonnes of gold came from the USA.

Striking gold is every miners dream. I’ve come to Salt Lake City to talk to a man who’s done it not once, but twice. Meet Pierre Lassonde.

Max

You've got such enthusiasm for the stuff then, what's it like to be a gold miner?

Pierre Lassonde

You know one of my favourite expressions is that with one drill hole you can create a billion dollars worth of wealth. But I've had it happen in my career twice, where we hit a discovery and that feeling is unbelievable.

Literally we created a billion dollars of wealth in a matter of a few weeks by finding a 3 million ounce deposit. You know, think about it. A 3 million ounce deposit today is worth 3 billion. It's unbelievable.

Max (commentary)

Pierre attributes the booming market to economic growth in certain regions.

Pierre Lassonde

I think where we're seeing a huge resurgence of the buying of gold is in the countries where the currencies are appreciating against the dollar. So if you look at China, gold demand is up 14per cent in the last quarter, viz a vis last quarter. Look at India, the largest gold buying country in the world, over 700 tons of gold goes into jewellery in India.

Max (commentary)

Miners simply can’t keep up with the world’s increasing demand for gold.

Pierre Lassonde

Gold production has been falling now since 2001. For six years in a row, no matter the fact that the price has tripled, production keeps on falling, and the reason is very simple; they're not finding it as easy as they used to.

Max (commentary)

This is Brant Hinze – he runs the American mining operation of Newmont, one of the industries most powerful companies.

Brant Hinze (Senior VP, Newmont Mining)

When you work for Newmont, this is what you do, mine gold.

Where we are standing right now is one of the largest most famous gold mining districts in the world. Right on the edge of the gold quarry pit. If you look at how the mining sequence goes, you will see over to the right here, we have the drilling and blasting, which then fazes over to the loading and hauling sequence.

Once the trucks are loaded, they will go to the primary crushing unit which you see off in the distance there.

Max (commentary)

Everything about gold mining is on a massive scale. Even at 6’6” Brant is still dwarfed by these trucks.

Brant Hinze

What you are looking at right here now, is a 240-tonne haul truck. This haul truck costs about £3 million dollars, now if you look in the background behind me here you will see a shovel that is picking a about 60 tonnes each load, that shovel, that investment is about a $7 million investment by the time it is ready to load trucks.

Max (commentary)

And this is what gold production is all about. For every truck full of earth and rock they remove, they end up with 10 to 12 ounces of gold.

Brant Hinze

And here is the final product – this product here that you are looking at is about a little over 4,000 ounces of gold here.

We got a product that is about 90per cent gold, a little bit of silver and other impurities it will go to final refining and then to the market.

Max (commentary)

The gold that Newmont produces each year from Nevada alone is worth a staggering $2bn, but rising energy costs have made gold a very expensive commodity to mine.

Pierre Lassonde

This gold bar it's not like, you take a $1,000 bill, they can print that for 5.2 cents. This gold bar here, every single ounce of that costs $600 all in to produce. So it's not like this gold bar just appeared.

Max (commentary)

Of course gold isn’t just appreciated by the wealthy; most central banks around the world hold some as part of their reserves. The Bank of England here has had some for over 300 years.

Philip Shaw

Central banks tend to keep gold in their reserves because of the traditional association between gold and the store of value, but for the best part of 30 years after the Second World War there was a gold exchange standard where currencies were actually directly linked to the price of gold.

Jill Leyland

Gold is no one's liability and that means it is the ultimate defence against unforeseen contingencies. Central banks because of what they have to do have to be prepared for the unforeseen problem that can arise.

Max (commentary)

In 1999, the Chancellor, Gordon Brown, sitting here at the treasury told the Bank of England to sell off some of our gold. Over the next few years it sold 395 tonnes, over half of the UK’s reserves.

Huw Edwards (archive footage)

The last Tory government was once accused of selling the family silver, well Labour is now selling off the family gold. 25 tonnes of Britain’s gold reserves was sold at auction today. The Bank of England wants to re-invest the money in foreign currencies. Gold prices have been falling steadily since the sale was announced.

Max (commentary)

Both the timing and manner of the sale turned out to be controversial. Gold had been falling in price but after Brown’s announcement it fell to its lowest for 20 years.

Tim Green

To suddenly announce that you are going to sell a significant amount of it at auctions when the market was in a pretty fragile state was totally to destroy or potentially to destroy the gold price.

Pierre Lassonde

Well Gordon Brown came and said 'Well, yep, I'm going to be selling gold,' so the market just caved in and the market went down to $250. And it could not have been worse handled at that point in time.

And, but did he pick a bad time to sell gold? He picked the right bottom.

Max (commentary)

Following sales by both the UK and other central banks, the Central Bank Gold Agreement was created in 1999. This limited the amount of gold a country could sell in any one year.

So what were the reasons behind the decision to sell?

Philip Shaw

There are a number of reasons why central banks decided to sell large proportions of their gold reserves. I think firstly we're not in a, in a gold exchange standard, therefore, some of the traditional reasons for holding gold have disappeared. Also gold is a volatile instrument in terms of its price.

Max (commentary)

Most financial advisors say it makes sense to diversify your portfolio, especially when there are limited ways of making money on the gold stored.

Philip Shaw

The way that central banks make money with gold is simply if the gold price appreciates. There is no dividend on gold as there would be with a stock nor is there a coupon on gold as there would be with a government or a corporate bond.

Max (commentary)

So how was the money re-invested?

Philip Shaw

The Bank of England decided to invest the proceeds of the gold auctions in safe instruments, mainly government bonds from the rest of the European Union, the United States and Japan.

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Content last updated: 23/06/2008

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