All that glisters may not be gold

It has long been the plaything of kings, the spoil of conquerors and supposedly the safest investment that money can buy. But for the people of Britain, our national nest-egg may not quite be what it appears.

Hidden away in vaults under the City of London, Britain’s hoard of gold bullion, regarded as the best insurance against any turmoil in global money markets, is beginning to crumble. The deterioration, some experts claim, may suggest that it is not pure gold.

The Bank of England, guardian of the 320-tonne stash under Threadneedle Street, admitted yesterday that cracks and fissures had appeared in some of its gold.



Questions put to the Bank, made under the Freedom of Information Act, revealed that this deterioration would temporarily reduce the gold’s £4 billion value and make it more difficult to sell.

Revelations about its physical deterioration were secured by the trade journal Metal Bulletin, which has been trying to ascertain the truth since May. Rumours that the Bank’s gold was not in tiptop condition have circulated in the gold market for years, but Stuart Allen, the Bank’s deputy secretary, has now confirmed there is an issue.

“This is not about purity, this is about physical appearance,” the Bank insisted, saying that its bars were 99.9 per cent pure gold. The problem was due to the age of the bars, many of which were imported from the US in the 1930s and 1940s.