Osama saw glittering prospects for gold

WASHINGTON • Osama bin Laden, gold bug?

It seems so. At the end of 2010, Al-Qaeda found itself suddenly flush after securing a US$5 million (S$6.8 million) ransom, and the group had to decide what to do with its windfall.

At a time when the financial uncertainty of the Great Recession made gold a hot investment, Osama turns out to have been as bullish about the precious metal as any Wall Street financier.

In a 2010 letter, he told Al- Qaeda's general manager to set aside a third of the ransom - nearly US$1.7 million - to buy gold.

The letter was part of the trove of intelligence seized by US Navy Seals in the raid on Osama's compound in Abbottabad, Pakistan, in 2011 that was declassified last month by the Central Intelligence Agency.

It offers a glimpse into how Al-Qaeda sought to manage its finances and what militant groups have tried to do with the money they raised.

"The overall price trend is upward," Osama wrote, in Arabic, to Atiyah Abd al-Rahman. "Even with occasional drops, in the next few years the price of gold will reach US$3,000 an ounce."

Osama may have lacked investing acumen - gold peaked at US$1,900 an ounce five months after his death in 2011 - but he seemed to have had a keen sense of the financial zeitgeist.

His belief in gold's bright future was shared then by many Americans and some financial luminaries including George Soros and John Paulson, who were investing heavily in the precious metal.

Demand was so high that in 2010 JPMorgan Chase reopened a long-closed underground vault used to store gold.

If Al-Qaeda had bought gold when Osama advised, it was a bad bet. On the day his letter was dated, Dec 3, 2010, gold closed at US$1,414.08 an ounce. Today, the price is hovering around US$1,230.

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on April 07, 2016, with the headline 'Osama saw glittering prospects for gold'. Print Edition | Subscribe