This appears to me to be an interesting gold based bond play. Even tho I don't qualify to trade these bonds, I'd appreciate hearing your thoughts, if any, on the concept?
Barclays to launch bonds linked to gold price Source: The Sunday Telegraph - London Publication date: 2003-03-16
BARCLAYS Bank is to take advantage of the current enthusiasm for investing in gold by launching guaranteed bonds linked to movements in the gold price. Gold, a traditional safe haven in times of uncertainty, has been in huge demand over the past three years as investors sought to avoid the volatile equity markets. In 1999 the price sank below $250 but, by last month, it had reached a six-year high of $388.
The bank said its high net-worth customers had expressed a growing interest in commodity-linked investments such as gold in light of the Iraq crisis and turbulent stock markets.
Details have yet to be finalised but the bond is likely to be similar to a product that has been piloted among a small number of Premier account customers.
This bond promises to pay a one-off return of 10 per cent if the gold price has risen by 8.5 per cent over its six-month term. Whatever happens to the gold price, investors are guaranteed to get back all of their original investment.
Barclays may also issue a separate bond that pays out if gold prices fall by a specified amount. Last Thursday, gold fell to an 11- week low of $334 as equity markets rebounded from Wednesday's sharp falls.
The bonds, due to be launched next month, will be offered to 600,000 Premier Banking customers, who earn more than pounds 60,000 a year.
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