By Murray Cox
David and Maureen
Four years ago, fearful of a property crash,
David and Maureen Somers sold their house and
bought gold. It's a tactic suddenly popular with
those seeking a safe haven for their money.
As safe as houses. This piece of perceived
wisdom no longer seems quite so wise as property
prices fall and stocks stutter.
But there is one area of the global financial
machine that is revving up - gold.
When times are bad, investors have traditionally
sought refuge in this precious metal. With
bullion dealers reporting a surge in business,
it seems history is repeating itself.
Prices are strong and David Somers is delighted,
because he effectively bet his house on it. The
retired croupier sold his house in 2004 and
invested the proceeds in gold. GOLD PRICES
1999: Prices lowest in 20 years after Gordon
Brown urged Bank of England to sell half its
These were sold in 17 auctions between 1999 and
2002 for average of $275.6 an ounce
Currently about $900 an ounce
In March it surged through $1,000 mark for first
"I was worried about the health of the financial
markets at that time, I was worried that
something like this credit crunch could be on
the way," he says.
"The fact that at the time, only £35,000 of
savings in a bank or building society were
secure worried me, and I spent a lot of time
doing research into what to do. Gold seemed to
the best place."
The 56-year-old had seen his friends suffer
badly in the last recession through negative
equity, punishing repayments, bankruptcy and
"I looked at my friends and saw that their prime
capital earning years were effectively taken
away from them because of the way the system had
Mr Somers and his wife Maureen claim it would be
"vulgar" to say how much they invested in gold.
However, he does say they sold their
three-bedroom, detached house in Poole for a
significant profit, and the couple have since
almost doubled their money again in gold. GOLD
It's a commodity, so subject to capital gains
tax, less expenses
Mr Somers buys and sells gold each year to take
advantage of capital gains tax allowance
This also helps increase his overall gold
"Over thousands of years gold has never reached
zero. The price is a risk, but at the end of the
day I will still have the same amount of gold,"
"There are people who probably hold bank shares
that would have been seen as conservative
investments and you could question what they are
going to be left with."
Mr Somers has never touched the gold he owns,
but is able to track its value online.
"It's in a secure vault and I'm really quite
happy that they don't let people in to look at
it or fondle it. That said, we have stroked the
computer screen when we've seen the price go
If the couple need money they simply sell some
of their gold - it can be sold by the gram,
currently about £16 - and the funds are
deposited in their bank account the following
Commission fees are typically less than half of
a percent, and insurance against theft is also a
The couple now live in rental accommodation in
Somerset, although Mr Somers hopes to buy
property again once prices drop further.
Other investors are now following suit, with
bullion dealers reporting a sudden upswing in
Bullion Vault is an online gold broker in west
London, which allows clients to buy and sell
certified gold held in vaults in London, Zurich
and New York.
It is currently opening an average of three
times as many accounts a day compared with the
start of September.
Founder Paul Tustain says the appeal of gold is
its ability to hold its value over time, and it
measures up well against inflation.
"There is a story told about a Roman emperor who
bought a suit of clothes thousands of years ago
with an ounce of gold. Today that same ounce
would be worth about $900, and that would again
pay for a suit of clothes," he says.
Mr Tustain stresses that gold is a long-term
investment that comes into its own when times
are bad, like the Great Depression and during
the stagflation of the 1970s.
And Mr Somers, for one, is glad he turned bricks
and mortar into gold. "What's happening at the
moment is like a financial blitz, and I feel
like gold is my tin hat at this time. I wouldn't
want to be in a bombed-out economy without it."