Got 400 grand lying around, and want to look like a demigod?
No? That’s too bad. For today, Sotheby’s is auctioning something that wouldn’t look out of place in the hands of a mythological hero, returning triumphant from some divine trial or conquest.
Picture Jason and the Golden Fleece mixed with Perseus beheading Medusa, and you’re on the right track. It’s a life-size gold head (pictured right), modelled on Kate Moss by an artist called Marc Quinn.
The contemporary art market is no place for value investors. There’s roughly £240k worth of gold in the head (8kg), well below the £300-400k price estimate, and the gold isn’t pure enough to get a VAT exemption (only 18ct). Not to mention the myriad other costs that come with owning and selling art – from insurance and storage costs, to auction fees.
However, it’s the environment in which the head will be sold that is a revealing sign of the times.
The item is headlining (somewhat literally) Sotheby’s first ever auction devoted to purely to gold. Titled “The Midas Touch”, all items are in some way related to “nature’s most bewitching creation”: lots range from antique gold daggers, to gilded chairs, to vintage gold Rolexes.
The incentive to hold the auction will sound familiar to gold bugs: the insatiable demand for gold from the East.
Sotheby’s gave its reason for the gold-themed auction in the Telegraph (emphasis mine):
“Gold has always been a universal symbol of status and has huge historic provenance but we have seen this renewed demand for gold items mainly due to new interest from markets such as Asia, Russia and the Middle East.”
It’s not just art collectors that are after the yellow metal. Whatever their motivation, some central banks are after it too – just not the European Central Bank, the Federal Reserve or the Bank of England:
Source: Luke Gromen, Twitter
A new addition to this group is Hungary, who just increased its gold reserves tenfold, to 31.5 tonnes. While this is less than 5% of Hungary’s reserves, these moves at the fringes are worth paying attention to.
The chaos in the markets last week led by the US has broken gold out of its slumber, and Charlie Morris over at The Fleet Street Letter is adjusting the Whisky and Soda portfolios accordingly. Charlie has a very unique perspective on gold, which I’ve not seen shared by anybody else in the investment world. You’ll see what I mean if you take a look at his keynote speech at the Denver Gold Forum, which you can watch here (scroll down to 12:20pm to find it).
We’ve a keen interest in gold over at Zero Hour Alert (we’ve actually a certain preference for what we consider the best kind of gold), and as you’ll know if you’ve read Capital & Conflict for a while, we’ve been warning that more market chaos lies in wait due to The Italian Problem. Our broadcast warning investors is going down this week – if you’ve not watched it yet, you can do so here.
All the best,
Boaz Shoshan
Editor, Southbank Investment Research
Category: Investing in Gold