“I didn’t want to be one of those people who carried on just for the sake of carrying on,” Charles said yesterday in an interview. “The new challenges are for our talented younger people to carry on through. The Asian markets in particular are liberalizing, which in turn is creating new and exciting potential for growth and development.”
Bullion for immediate delivery surged almost 12-fold since 1975 to $1,663.50 an ounce today. It reached a record $1,921.15 in September as it climbed for an 11th consecutive year. The longest bull run in at least nine decades has seen investors accumulate more metal in exchange-traded products than the holdings of all but four central banks. Banks are buying more gold to diversify currency reserves.
There are 27 people globally directly reporting to Charles, with a total of about 70 including those supporting the global precious metals business, he said. His “proudest” career achievement was as LBMA chairman from 2006 to 2009, he said. He will resign from his post as director of gold, silver and platinum fixings on retirement.
Charles took part in his first fixing while working for Johnson Matthey, witnessing a then-record price of $850 an ounce and the longest fix which took more than two hours in the early 1990s, when a military contract that was paid for using gold depressed prices, he said. Fixings are conducted twice a day and orders can be revised throughout the process as the price is moved higher and lower until participants are satisfied. Some mining companies use the fix to price their sales.
Charles was also trading gold during the infamous Brink’s-Mat gold robbery in 1983. An armed gang raided a Heathrow warehouse operated by the security company and escaped with about 26 million pounds ($42.2 million) in bullion, diamonds and travelers checks.
Gold ETP Development
Charles was one of four people who were “instrumental” in the development of the first gold-backed ETP and “that idea changed the world of gold forever,” he said. Interest soared in the decade since the products were introduced, with ETP holdings at 2,385.6 metric tons yesterday, about 1% below the March 13 record, data compiled by Bloomberg show.
The gold now held in ETPs is valued at $127.6 billion, according to data compiled by Bloomberg. HSBC Bank USA N.A. is the custodian for the SPDR Gold Trust, the biggest gold ETP, storing the gold in its London vault. There were 1,278.32 tons in the trust yesterday.
Gold has dropped the past three months and investor holdings in gold ETPs declined in March and April.
“I do believe, however, that we’ll be talking about record prices again before too long,” Charles said. “Central banks are once again a force in the market. When this is combined with private and institutional investment and access to markets globally through over-the-counter, futures and ETP products, then it’s easy to believe that any dip in the price of gold will be relatively short lived. The rally isn’t over yet, in my opinion.”
Charles, who has two adult children, said he intends to travel with his wife after retiring. “I’m going to try my hand at doing something artistic for the first time in my life.”
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