Gold goes mainstream at Harrods

Today the upmarket London department store Harrods will sell gold bullion and coins over the counter for the first time in its history. It will be sold at the Harrods Bank branch on the lower ground floor of the Knightsbridge store. The owner, Mohamed Fayed, has teamed up with Produits Artistiques Métaux Précieux (PAMP), the Swiss refiner, to sell gold in the store. Mehdi Bakhordar, managing director of PAMP, said: "Harrods stock our full range and are now the only location in London where investors can purchase a 12.5kg gold bar 'off the shelf'."

This is a significant event. It is signalling the precious metal has gone into the retail mainstream and will be the talk of cocktail parties. In the UK, the allure of gold does not glitter as much as the attraction of real estate. Now a recognised brand name as entered the market and reached out to a new audience.

Wealthy investors are looking for an alternative asset class to diversify away from low interest rates and falling property and stock market portfolios over the last twelve months. In January 1980, the gold price hit a record US$800. When adjusted for inflation in US terms, it should be worth over US$2,300 today. If one takes all the gold that was ever mined since the history of mankind, it will just about fill two Olympic-sized swimming pools today. Yesterday, the gold price breached US$ 1,070 an ounce, another new record.

Asia investors will wonder what all the fuss is about. Today, government leaders in Beijing are using the media to encourage citizens to invest at least 5% of their savings into precious metals. Maybe, this issue will grace a magazine cover soon. More important, this is a another sign of a market top.