Why I won’t be selling my gold or silver

It must be a couple of years since, spooked by the banking crisis and walking past the Savoy hotel on the Strand, I remembered a clever but impetuous Polish friend’s advice to buy bullion — silver or gold — and his mention that there was a respectable dealer in the Savoy arcade. And as I walked I had found my feet all but drawn by some mysterious, irrational force into the arcade. I had struggled home with an implausibly heavy briefcase. The bullion-buying phase of my life, phase one, had begun. I made arrangements for secure storage with a bank, and cancelled further payments into my pension plan.

I wrote about that day for the Times. I have not written about it since. Readers who post comments online sometimes ask how my investments are doing; some sneer; some seem envious; others are curious.

And my answer? I have entered phase two. Which is lucky. In phase one I should have found recent plummeting gold prices hard to take.

Phase one was characterised by a suspicion that I knew to be exaggerated but which nagged me nevertheless: that the global economy might crash again; that the price of gold and silver would soar; and that I should make big speculative gains on my purchases. This, I suppose, was the casino phase of my bullion-buying spree: quite short-term and desirous of a large, one-off gain.

It never occurred. Silver did rise, then fell back a bit, but remains more valuable than when I bought mine. But my notional gains are modest. Gold rose quite a lot, then fell right back and has been falling as I write. I’m certainly nursing a loss on my Britannia coins. Had I put the savings in my Northern Rock (now Virgin Money) account, I should have done a good deal better.