In 1983 a total of 6,840 gold bars were stolen from a high security vault in Heathrow in what is still considered to be ‘the crime of the century’.
40 years on and the gold heist is still the biggest single-theft of gold in history. What’s incredible is that the perpetrators never even expected to steal any gold. They were instead expecting to find around £3 million in cash.
After failing to get into the targeted vault the armed robbers discovered three tons of gold bullion as well as diamonds and cash. Recorded testimony of one of the security guards recalls the delight of one of the robbers when he realises some previously looked over grey boxes contain gold bars that are ‘four nines!’ the purest of gold bullion bars.
This weekend sees the release of the six-part drama The Gold, in the UK. The series is based on the infamous 1983 Brinks Mat heist that saw six-armed men steal over £26 million of gold bullion from the security depot at Heathrow. Today that same gold would be worth over £100 million.
Accidental Treasure Hunting
What was supposed to be a quick smash and grab involving a few bags to help carry away £3 million in cash, soon turned into a protracted, drawn out operation. The operation ended up taking over two hours and catapulted the six men into history books as the perpetrators of the ‘crime of the century’. In many ways, the crime is still ongoing. Only half of the gold has ever been recovered.
In total 6,840 gold bars were stolen along with cash and diamonds worth £113,000. Of course, the tale doesn’t end there. It is very difficult to make gold just ‘disappear’ and convert into far more easily hidden cash.
A trail of death and violence has followed the Brinks Mat gold for the last forty years. The gang ended up roping in a number of nefarious individuals to help them smelt and disperse the gold in order to realise some of its cash value. The proceeds from the robbery are thought to have fuelled the London Docklands property boom as well as the UK cocaine market.
Worried about the integrity of the London Gold Market, the Bank of England had to step in and rescue the gold’s owners, the banking and gold-trading arm of Johnson Matthey, when they collapsed less than a year later.
Our Obsession with Gold
The trailers for the BBC series have prompted many viewers to recall back to the time when the robbery had just happened. It’s fixed in many peoples’ memories; it was such a significant theft. But I wonder if a standard robbery of cash would have had the same lasting effect? I suspect not.
There is something about gold that grabs most people’s attention. Take the robbers who stole the gold, for example. There is nothing to suggest that these were men familiar with the spot price of gold, no indication that they saw those 6,000 bars of gold and knew how much it was worth. But, they did know it was worth making the extra effort to steal, instead of trying to get at the planned £3 million in cash.
Gold is one of the few things we have in common with ancestors from long ago. We desired it 1,000 years ago, 500 years ago, 100 years ago, and (clearly) forty years ago. Just as we do today. There are few things we instinctively know about finance and investments, but the need to own gold is one of them.
This has something to do with the fact that the yellow metal has stood the test of time. Some psychologists have also postulated that we are attracted to precious metals and stones because they shine and sparkle.
Much like the reflection of the sun on the water, the most necessary resource that the human brain is designed to spot and identify. This might be one of the reasons, but I think it’s because we know that the gold our multiple-great grandfather dug up and wore proudly round his neck or exchanged for livestock and land, still exists today.
Gold is timeless. As we see from the disaster that was the aftermath of the Brinks-Mat robbery, it is near-impossible to disappear.
In fact, it is rumoured that much of the unrecovered gold has made its way back into the gold market through various ways and means. It’s still pure gold and arguably back in its rightful place.
Small fry in today’s money
What’s really fascinating though is that the theft of over (in today’s money) £100 million of gold was the crime of the century but of the 20th century. Because there is no way that it compares in any way to the ongoing theft that we are currently experiencing in the 21st century.
I am, of course, referring to the inflationary efforts of central banks.
The Bank of England inflation calculator shows that £10 in 1983 (the year of Brinks Mat robbery) would now be worth £29.95. That’s not because interest rates have been so generous or because your money has been so wisely invested. It’s because the pound is now worth three times less than it would have been worth, then. Something that cost you £10 then, would now cost you nearly £30.
For the US Dollar, an item that cost you $10 would today cost you $29.33. A similar rate of depreciation that has occurred to the GBP.
It’s a similar story in the Eurozone, since its launch in 1999, €10 is now worth €16.40.
That gold today might have gone up over 5 times in price (and so arguably outperformed inflation), but we’re still talking about the same amount of gold. The thieves haven’t managed to make more gold. Instead, as time passed, gold has hugely increased in price relative to the British pound, dollar, etc. But, more importantly, it has held its value.
Whoever has been holding onto that gold since 1983 will have stolen something that was worth around £280 per ounce, and today is worth £1,560 per ounce (at the time of writing).
They have the same amount of gold and it has the same amount of value, just an increased price. Yet the £3 million in cash they wanted to steal would be worth significantly less, three times less.
When we admire how much the price of gold has gone up since the Brinks Mat robbery, we’re actually grave dancing. Because what we’re celebrating is the theft of value from fiat currencies or a loss of wealth for those who have been saving in cash and cash-based assets.
That is why the central banking antics of the 21st century will be the biggest theft of the century and we’re not even a quarter of the way through it yet.
Looking forward to watching The Gold but no access to the BBC? It’s due out in the US later in the year, but in the meantime check out our gold short for a bit more Gold drama.
From The Trading Desk
Gold, after an initial surge and hitting highs over $1,950 last Wednesday after the Fed 25bp rake hike announcement.
On Friday we got a super strong non-farm payroll print of 517,000 jobs added versus the 188,000 estimates, which pushed the USD and bond yields higher and Gold sold off, falling by more than 2% last Friday.
Prices are more settled this week after Fed Chair Jerome Powell on Tuesday comments from the Economic Club in Washington DC, with Powell hitting a more balanced tone on inflation, reiterating that disinflation is underway.
This has calmed expectations for now that rates may not have much higher to go.
However, Powell did acknowledge that rates may need to go higher to gain control of inflation if it continues to persist and the economy remains strong.
In fact, New York Fed president John William said the Fed funds rate could still yet go to 5%-5.25%.
Near term support for gold comes in at the $1,860 level with a move up to the $1,900 level to watch on the upside.
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08-02-2023 1880.75 1872.65 1555.76 1552.61 1750.04 1747.00
07-02-2023 1873.80 1870.70 1561.81 1561.66 1748.26 1751.16
06-02-2023 1873.50 1873.25 1556.69 1554.61 1739.54 1743.43
03-02-2023 1910.00 1875.35 1559.71 1551.29 1747.27 1731.89
02-02-2023 1954.90 1921.65 1586.21 1565.57 1779.94 1761.96
01-02-2023 1925.60 1925.90 1563.39 1561.33 1768.66 1766.63
31-01-2023 1905.20 1923.90 1546.83 1562.01 1759.83 1772.87
30-01-2023 1926.75 1924.10 1552.00 1554.48 1765.67 1766.32
27-01-2023 1928.25 1923.05 1558.03 1553.44 1770.71 1769.98
26-01-2023 1936.45 1932.45 1562.52 1561.61 1776.31 1774.96
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