Making a mint out of the Royal family,

As the nation prepares for the arrival of the royal baby, Charlotte Beugge considers the investment opportunities in regal memorabilia. The Royal family has never been so popular with the public both here and abroad. Anniversaries, weddings and arrivals of new babies have put the House of Windsor in its ascendancies.

Indeed, Britons are forecast to spend more than £243m on celebrating and commemorating the royal baby – having spent more than £163m just on souvenirs from William and Kate's wedding.

But is it worth buying pieces to celebrate the new arrival – and are items from earlier royal events worth anything?

There are two types of royal memorabilia. The first includes special china, coins and commemorative ornaments featuring images and emblems of the Royal family. The second type of collectables are more personal, embracing items such as letters, documents, clothes – or more bizarre pieces, such as wedding cake.

Generally speaking, the older the monarch, the more valuable the memorabilia will be. It's not necessarily the obvious items such as coins and china that could be worth something. Indeed, the most mundane items you could have hidden away in a drawer might be worth a king's ransom. And it's not just Britons who want a piece of the royal action. Adrian Roose, a director of Paul Fraser Collectibles, said: "There's a huge market for rare Royal memorabilia. Autographs, signed Christmas cards, items of clothing worn by the Royal family, even Queen Victoria's bloomers which sold for £9,375 in 2011: our US clients can't get enough of it: 60 per cent of our royal memorabilia business is in America."

Richard Westwood-Brookes, historical documents specialist at Mullock's Auctioneers, Shropshire, added: "Our American clients like anything linked to George III in the 1770s, before the war of independence. They also like items associated with Edward VIII and Wallis Simpson – because it was the closest they've come so far to having an American queen. The French also like Edward and Mrs Simpson: to them, it's the romance that appeals."

In addition, he added that anything with a link to Bonnie Prince Charlie sells well, thanks to the increasing interest in Scottish nationalism.

Mr Roose added: "Henry VIII, the Queen, Diana, William and Kate are by far the most popular and valuable. The Duke and Duchess of Windsor autographs can be found for a few hundred pounds rising to £90,000 for one of the historically important Henry VIII signed documents we have in stock."

Jonty Hearnden of CashintheAttic.com, which offers online valuations, and who also stars in the BBC television show of the same name, said: "Far and away the most sought-after royal items are those that have been 'touched by royalty'. Recently, a lady in Bath happened upon a slice of the Queen's wedding cake tucked away in an old chest of drawers. She had it valued and took it to auction: it went on to sell for £360."

Christmas cards and even paper napkins with the all-important royal link can be surprisingly valuable. Mr Westwood-Brookes said that paper table napkins linked to early 20th-century royal events can sell for £50-£60 each. "They were mostly torn up and so only few remain, hence the value," he said. "If I were suggesting items to buy to commemorate the royal baby I'd say buy the most disposable item you can get, even if it's aesthetically unpleasant, such as tin trays, tea towels: the kind of thing that cost very little and as such is likely to be chucked away."

And Mr Hearnden added: "There are vast numbers of items of little to no worth out there. The Royal family is not trademarked: anyone can produce a souvenir and use images of the family, so items that will have significant value must be carefully chosen. First, you want the souvenir to be manufactured in the UK by a reputable factory such as Wedgewood. And look out for more unusual items: Britons have a great sense of humour and the more quirky knick-knacks have proven to be very desirable."

Mr Roose added that it is "very unlikely" that any mass-produced mementos of the royal baby will increase in value "but that's not the point for most purchasers. They buy it because they love it and not because they think a £10 plate could be worth £100 in five years. However, if you can get William to sign an autograph for you you'll be on to a winner."

China commemorating royal events is generally not doing well. Mr Hearnden explained that collecting such items started in the late 19th and early 20th century as the elderly Queen Victoria became very popular. This was followed by the accession of her son Edward VII and then the patriotism engendered by the First World War: all events marked by commemorative china. "People had cabinets of the stuff," he said. "But the owners of these items are dying now, meaning objects are coming onto the market in greater numbers and the prices are falling."

"Commemorative china royal pieces can sell for between £5-£10 or £30-£50 for better items. Today thirtysomethings don't want to collect china commemorative plates. They want the quirky items.

Mr Westwood-Brookes agreed. "With china, buy it and enjoy it but don't assume it's an investment." He said that there are two exceptions on royal commemorative china. A mug commemorating the 1947 wedding of the Queen and the Duke of Edinburgh could be valuable because only one pottery produced the items and in the desperately poor post-war years, few could afford to buy one.

Even rarer are mugs that were commissioned by a local squire for the children of a primary school that the Queen visited not long after she ascended the throne but before she was crowned.

More recently, the dress that Kate wore at a fashion show that was said to have entranced William sold for £78,000. Mr Roose added: "We had a client who managed to get William to sign an autograph when he visited her Tesco store. It sold for more than £1,000. We've even sold pieces of Kate and William's wedding cake for £1,900 at our auction. Items touched/owned/signed by royals are the items to focus on." As yet, a Christmas card signed by William and Kate has not come to market but would command a decent sum if it did.

And cards aren't always valuable. Since the Seventies many of the Christmas cards sent out by the Queen and the Duke have been signed by machine – and these cards have little to no value. One genuinely signed by the Queen and the Duke could make up to £500.

However, royal items can fall and rise in line with their popularity. Mr Westwood-Brookes said: "Just after Diana died in 1997 Christmas cards signed by her sold for £3,000 each: now you'd be lucky to get £300-£400. I wouldn't buy anything linked to Diana: Kate has replaced her." However, Diana's dresses can sell for over £100,000 particularly if they are linked to a particular event.

Further back in history, the fascination with Henry VIII continues. Anything signed by the much-married monarch could sell for tens of thousands. And the arrest warrant signed by Oliver Cromwell for Charles II sold for £34,000. More recently, anything from the short period when Edward VIII was king (January-December 1936) is valuable due to its rarity.

Post-abdication letters signed by Edward and Mrs Simpson can sell for £500-£700. A letter not even by the Duke of Windsor but by a worker on a ship the royal couple travelled on, sold for £6,000 thanks to the amazing insight it gave into their sometimes turbulent marriage.

If the US economic recovery keeps its present pace, goldbugs and miners can expect bad news

Gold divides investor opinion like no other asset: either it is a worthless investment without yield and utility, or an insurance policy against unscrupulous central banks that should be bought irrespective of price. Both views are, in my opinion, flawed. Gold is a legitimate asset class: a capacity-constrained and widely accepted currency which has protected purchasing power over many centuries.

But this does not mean that it should be bought on the basis of a lazy narrative that does not attempt to calculate a fundamental value – and the problem with gold is that all reasonable attempts to value it point to its chronic over-valuation.

So although gold is now a third off its 2011 high of $1,897 an ounce, I fear there is worse to come for gold, gold miners and goldbugs – particularly if the US economy continues to recover at its present pace.

Gold’s role as an investment is to protect investors against the loss of purchasing power in money that can be printed by central banks, which, although accepted as a medium of exchange, has no intrinsic value. Recently, asset purchases funded through new money created by central banks – quantitative easing – has stoked fears of hyperinflation.

Yet inflation in the real economy continues to be negligible. Since 2000, core inflation in the USA has averaged just 2.5pc per annum (an increase of 38pc) while gold (measured in US dollars) has returned 12.4pc per annum (an increase of 356pc), nearly five times the loss of purchasing power in the dollar.

This fundamental disconnect between inflation and the price of gold cannot be sustained indefinitely: either inflation has to rise dramatically or gold has to fall.

In 1968, gold became freely tradable, having previously been fixed by the US government to the price of the dollar at $35 an ounce. Since 1968, the most credible measure of US inflation – the core consumer price index – has risen by 578pc, an average of 4.4pc per annum, suggesting a loss of purchasing power in the dollar of 85pc. This shows clearly why investors should be concerned about their wealth being eroded by inflation.

However, if we multiply the price of gold in 1968 of $35 per ounce, every year since, by the annual US rate of inflation, then we can calculate a fundamental value of gold based on purchasing power.

Such a calculation results in a fair value for gold today of just $240 an ounce, only a fifth of its current price of $1,280 an ounce. On any fundamental analysis, gold is a grossly overvalued asset. Investors should be concerned about inflation, but more wary of the price of gold.

There is another problem for gold, which accounts for the timing of its descent into a bear market, namely that its antithesis, the US dollar, should inspire greater confidence in the world’s financial markets. US home prices are now increasing at a double-digit pace year-on-year and the country’s unemployment rate, at 7.5pc (down from a peak of 10pc), is falling toward an acceptable equilibrium. The debate on US quantitative easing – in contrast to Europe and Japan – has therefore shifted to the timing of less stimulus, rather than more.

This should return the US dollar to its status as undisputed global reserve currency, particularly as the dollar may pay a more attractive interest rate in the future than the recent past. In a world of US dollar economic and financial hegemony, last seen in the 1990s, investors will choose the greenback over gold.

If we are cautious on the prospects for the yellow metal, we have to warn of the implications for the gold miners themselves. The decade-long boom in the price of gold has encouraged them to extract much lower grade ores. This has resulted in significantly higher costs, with the expected boom in industry profit margins failing to materialise.

The world’s leading gold miner, Barrick Gold, believes that the entire industry’s all-in sustaining costs of production are now $1,200 an ounce, up from $300 in 2002. With the gold price at $1,280 today, the gold industry as a whole is only marginally profitable and close to haemorrhaging cash.

The gold industry will respond to this crisis by cutting higher-cost production (mining only higher-grade ore) and mothballing capacity. As mines are closed, orders for mining equipment will dry up and second-hand equipment, such as excavators, trucks, grinders and drills, will be dumped on the market. This will have calamitous ramifications for those companies reliant on gold miners’ investment plans.

Many gold-mining companies also have significant financial debt, which will result in significant corporate bankruptcies or at the very least generate a need to raise equity to recapitalise their balance sheets for tougher times.

Normally, the marginal cost of production of a commodity acts as a floor to the commodity price. There are a number of reasons why this is not relevant to gold. Gold is unique. It is not consumed. Indeed, all the gold ever mined remains in existence today. In essence, this above-ground stock represents its supply. The World Gold Council estimates this stock at 175,000 tonnes.

This year, annual mined production is expected to be 2,900 tonnes or just 1.5pc of total supply, and thus is not material in influencing the price. Moreover, if no gold were mined, unlike the production of other commodities, it would not prevent the global economy from functioning perfectly well. Those who argue that the marginal cost of production of $1,200 an ounce should act as a floor on the gold price are deluded and should be ignored.

Today, gold looks like the ultimate high-risk, low-reward investment rather than the low-risk, high-reward commodity it is commonly seen as being. In the absence of a meaningful pick-up in inflation, its price needs to fall another $1,000 an ounce before offering a buying opportunity. Gold is not worthless, but it is chronically overvalued...

The best cards for your holiday spending

Forget ordering your euros online, or getting one of those newfangled multi-currency prepaid cards.

New research, compiled for the Telegraph, shows that one of the cheapest ways to pay for your holiday spending is simply to use a debit card in an overseas cash machine.

Both Nationwide and Norwich & Peterborough building societies offer a combination of competitive exchange rates and low foreign-loading charges, that match – or beat – the best online currency deals. Meanwhile Halifax offers a credit card that features far more competitive rates than most prepaid cards. And the research shows that even some of our high street banks may not charge as much as you think to use your plastic overseas – provided you use it wisely.

But as sterling falls again – hitting a three-year low against the dollar this week – tourists will find their holiday spending may not stretch to as many cocktails, so it makes sense to get the best deal possible.

Below we look at what cards you should be carrying in your wallet this summer.


The best plastic for cash machines

The research, by Travelsupermarket.com shows N&P customers will pay just £428 to withdraw €500 from an overseas cashpoint; Nationwide customers will pay £437.66 for the same transaction (based on Monday’s exchange rates).

On the same day the best online deal was from FairFX, which charged £437.45 to buy €500, while MoneyCorp offered £437.56; but both require customers to order money in advance, and wait at home for the delivery – which may not be practical.

But customers may not want to switch their bank account to Nationwide or N&P just to get cheaper holiday money. So how does your debit card compare?

As the table, below, shows, Halifax offers the most competitive deal: withdrawing €500 will cost you £441.37 on its Rewards account. NatWest is the most expensive, charging £448.43 to withdraw the same amount of money. This, though, is still just over £10 more than the cheapest online deal from FairFX.

However, the big high street banks start to look less competitive if you are taking out smaller amounts of cash more frequently. This is because most make a charge on each withdrawal. This can be a flat fee (typically £2) or a percentage charge, as well as loading the exchange rate.

As N&P doesn’t impose these usage fees it is still the clear winner. Whether you take out €500 in one go, or in 10 separate transactions it costs the same.

Nationwide has a low foreign usage fee (it is higher outside the eurozone). So withdrawing €100 five times will cost an extra £4.

However, Lloyds TSB will charge £450.90 for taking out €100 five times. Taking out €50 on 10 occasions would cost £460.90, making it almost £30 more expensive than the cheapest deal.

Bob Atkinson of Travelsupermarket.com said: “If you are only taking out small amounts, debit cards become very expensive. You are paying up to 10pc over the odds.” If you prefer to withdraw small amounts, then switch to Nationwide or N&P, or get a prepaid card instead.
The best credit card deals

If you want to make your holiday spending go further, use a credit card in shops and restaurants, preferably one that doesn’t impose a foreign loading fee. Halifax’s Clarity Card is the standout card. Spending €500 on it costs just £428.64. This is comparable to the N&P deal, but the card is likely to have wider appeal. In contrast the Post Office Platinum Card would charge £439, and Barclaycard £450.

Remember, though, to pay off the balance in full when you return, interest charges will far outweigh the benefit of no foreign usage charge.

As with any credit card do not, on any account, use it to withdraw money from a cashpoint. If you do you will be hit with additional charges. Mr Atkinson said: “This Halifax card offers good exchange rates and no foreign load fees. You also get the benefit of protection under the Consumer Credit Act on any purchases.”
The best prepaid cards

Caxton FX and Travelex offer two of the best-value prepaid cards. Neither charges fees to open the account, nor to load money onto the card. Similarly, you won’t pay any usage fee when using these cards to withdraw money from an ATM. The cost of withdrawing €500 on both is £440 – cheaper than most banks, particularly if you are making lots of withdrawals.

However, prepaid cards offer two big advantages. One is security: if the card is lost or stolen you can reclaim the money. Also if it falls into the hands of fraudsters the maximum they can take is the money you’ve stuck on it for your holiday. It isn’t linked to your bank or credit card details.

The other advantage is that you can effectively play the currency market, and move money onto the cards on days when the pound moves in your favour. A spokesman for ICE, which offers its own prepaid card, said: “Last year there was more than an 8pc difference between the best day for buying euros and the worst.” Locking in your holiday money at a favourable rate can make more difference to your spending money than whether your debit card is with Barclays or NatWest.

Mr Atkinson added: “Check the terms and conditions of prepaid cards. You are likely to get a less favourable rate if you are switching surplus euros back to pounds after your holiday.”
How low can you go?

According to HiFX, the currency broker, your holiday money buys a lot less now than it did five or 10 years ago. At its current rate, £500 will get you around €577.50, before any charges. The same amount in sterling would have bought you €630 five years ago and a whopping €725 in 2003.

It's a similar picture with the dollar. Today £500 will buy you $744, five years ago you would have got $990 (although it was slightly less, $830, 10 years ago).

But it's a different story elsewhere. Mark Bodega, director of HiFX, said those travelling to South Africa, for example, will find the pound buys them as many rand as it did prior to the financial crisis. He said: "Outside the eurozone, Turkey and Croatia look very good value, as rates are back up to where they were in 2007."

Gold set to shine again in recovery from worst quarterly drop in 113 years

Gold posted its worst quarterly performance in more than a century for the three months to the end of July, analysts at Macquarie calculate. Specifically, the metal ended the second quarter of 2013 at $1,192 (£782) an ounce, its lowest since August 2010 and representing a fall of more than 25pc below its level at the start of the quarter.

The slide came as investors increasingly turned to equities, lured by the prospect of a yield and reassured by improving economic data to move away from the “safe haven” metal.

The price move downwards then accelerated as Ben Bernanke, the Federal Reserve chairman, last month set out a timetable for unwinding the US central bank’s vast quantitative-easing (QE) programme — making gold less attractive as an inflation hedge.

But now analysts are starting to suggest that the gold price may be bottoming out, or at least be close to that point. Outflows from exchange traded funds (ETFs) have started to ease, but the gold price still remains near lows at $1,214 an ounce.

The negative sentiment has been justified, analysts acknowledge. But part of their reasoning is simply that the fall — representing the worst quarterly price performance for gold since at least the year 1900 — has been so steep that the tide has to turn

Dovish Bernanke drives pound and gold higher

The pound strengthened and gold rose to a two-week high after Ben Bernanke, the US Federal Reserve chairman, said the US economy needed quantitative easing to continue for the "foreseeable future".

"Bernanke's discourse was the nexus driver for a domineering dollar auction overnight," said Lee Mcdarby, of Investec Corporate Treasury.

"The instantaneous response was for gurus to run for the passageway entryway of their long dollar positions."

Mr Bernanke's remarks accompanied a moderately unbiased FOMC minutes in which policymakers communicated worries that expansion was moderating, which might expand force to proceed Qe3.

The Encouraged executive's message that premium rates are set to remain flat was comparable to that from Imprint Carney, the Bank of England Representative, and Mario Draghi, the ECB President, a week ago, which floated value markets.

Mr Mcdarby said: "Advertise response in the following 24 hours will be key in light of the fact that if this rally uses up steam and the business exchanges over underneath $1.5000, it lets us know that moguls still become tied up with the story of the US modifying strategy tack and have enough trust this will land in September."

He said that if the pound combined at current levels against the dollar it could indicate that the business sector was "feeling worn out on the blended messages" from the Encouraged and will sit tight for firm direction before "going long" on the dollar.

The dollar has reinforced against a crate of coinage since Mr Bernanke said after a month ago Nourished gathering that the focal bank may begin to decrease its $85bn-a-month security purchasing programme in the not so distant future.

as per the minutes of that gathering, distributed on Wednesday, around 50% of Bolstered policymakers needed to carry its gigantic financial stimulus bundle to a moderately quick stop not long from now, in place of eliminating it gradually by the center of 2014.

Then again, the minutes additionally made clear that Nourished parts are holding up for further confirmation of an economical change in America's job levels before they initiate movement.

Official information show that in spite of the fact that the occupations scenario has relentlessly expanded since the final Nourished gathering, the change has been sufficiently quieted to hose expects that it will apply the brakes suddenly.
Sterling, which two days back hits a three-year level of $1.4814, picked up practically 1pc to $1.5134 against the dollar in late morning exchanging on Thursday. Gold climbed 2pc to $1,285. 

Artists ‘bully house purchasers into utilizing unreasonable contract representatives,`

A developing number of building artists are constraining their customers into utilizing their leaned toward specialist and contract intermediary, specialists have cautioned. There has been a “checked build” in designers driving purchasers to utilize their proffered contract intermediary and specialist as a fair exchange for “motivating forces, for example free ground surface, a senior contract master has cautioned

These in-house contract dealers might not have access to the entire of the contract business sector or might charge high charges, which could exceed the quality of any impetuses, consistent with Alistair Hargreaves of John Charcol, the contract representative.

He said artists were not permitted to demand that you utilize their account experts unless a motivation was being advertised. These impetuses came in different structures, for example paying 5pc of your store, blanket your stamp calling or legitimate expenses or having diverse ground surface put in at no added expense.

“Not each artist does this, despite the fact that as a customer you will dependably be asked to address their committed contract merchant at first. The distinction is that a few planners will demand that you utilize their merchants, others just propose it,” he included.

Mr Hargreaves sharp out that any motivators must be announced to the contract loan specialist, as a valuer will normally lessen the quality of the new home by the quality of the motivating force. For instance, a property estimated at £400,000, with a 5pc store paid by the artist, will have its quality decreased to £380,000 by the surveyor. “What’s more in light of the fact that the quality of the house is diminished your potential contract measure will be decreased also, he said.