Modern art: investment or confidence trick?

Collectors and sellers have a common interest in propping up the art market. But the strain is beginning to show. The illusion can’t last for ever, says Eoin Gleeson.

At the centre of Damien Hirst's Beautiful Inside My Head Forever exhibition this week in Mayfair stood a 680kg bull encased in a tank of formaldehyde. With golden hooves, horns and head-dress, the bull has been christened the Golden Calf, and was expected to fetch between £8m and £12m at auction last Monday night.

In the end, it went to an anonymous bidder for £10.3m, a record for a Hirst. A reproduction of his famous pickled shark also sold well, going for £9.6m. Despite it being among the worst weeks for Wall Street since the 1929 crash, all but five of the 223 lots were sold, raising a record £111m. Sotheby's was quick to declare the auction a royal success, while the art world breathed a huge collective sigh of relief maybe there is still puff left in the contemporary art market.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.