[box]April saw the price of gold hit a Sterling and Euro record. While the GBP754 (or 865 Euros) per troy ounce stat still remains 5% below the all time US dollar record, this was nonetheless excellent news for the British investors.[/box]
Compare the GBP754/ounce price tag with the price of GBP562 per ounce, as gold stood back in August 2009 and it means that holders of the previous metal have seen the value of their gold soar 34% in value in less than a year.
It’s widely thought that the fact that gold is maintaining such a high price per ounce, despite the fact that the US dollar is making a notable recovery, indicates a growing number of people viewing gold as a ‘safe investment,’ in light of inconsistent currencies and the still prevalent economic uncertainty globally.
Gold is also proving a popular investment for those who, in times of US dollar instability, might have invested in Euros, Pounds Sterling or even Yen. As these currencies also continue to perform inconsistently, following the recent global recession, investors are increasingly turning to gold bullion, which has proven a more sound investment in recent years.
The pound sterling (symbol: £; ISO code: GBP [Great Britain Pound]), commonly known as the pound, is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, South Georgia and the South Sandwich Islands, the British Antarctic Territory, and Tristan da Cunha. It is subdivided into 100 pence (singular: penny, abbreviated: p). A number of nations that do not use sterling also have currencies called the pound. At various times, the pound sterling was commodity money or bank notes backed by silver or gold, but it is currently fiat money, backed only by the economy in the areas where it is accepted. The pound sterling is the world’s oldest currency still in use and which has been in continuous use since its inception.
The British Crown dependencies of Guernsey and Jersey produce their own local issues of sterling: the “Guernsey pound” and the “Jersey pound“. The pound sterling is also used in the Isle of Man (alongside the Manx pound), Gibraltar (alongside the Gibraltar pound), the Falkland Islands (alongside the Falkland Islands pound), Saint Helena and Ascension Island in Saint Helena, Ascension and Tristan da Cunha (alongside the Saint Helena pound). The Bank of England is the central bank for the pound sterling, issuing its own coins and banknotes, and regulating issuance of banknotes by private banks in Scotland and Northern Ireland. Banknotes issued by other jurisdictions are not regulated by the Bank of England; local governments use Bank of England notes as backing for local issuance by allowing them to be exchanged 1:1 at face value.
Sterling is the fourth most-traded currency in the foreign exchange market, after the United States dollar, the euro, and the Japanese yen. Together with those three currencies it forms the basket of currencies which calculate the value of IMF special drawing rights, with an 11.3% weighting as of 2011 (USD 41.9%, Euro 37.4%, Yen 9.4%). Sterling is also the third most-held reserve currency in global reserves (about 4%).
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